Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.

Indirect labor$1.00

Indirect materials0.70

Utilities0.40

Fixed overhead costs per month are Supervision $4,000, Depreciation $1,200, and Property Taxes $800. The company believes it will normally operate in a range of 7,00010,000 direct labor hours per month. Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs.

Variable Costs

Fixed Costs

Indirect labor$8,800Supervision$4,000

Indirect materials5,800Depreciation1,200

Utilities3,200Property taxes800

(a) Prepare a flexible budget performance report, assuming that the company worked 9,000 direct labor hours during the month. (List variable costs before fixed costs.)

MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2020

Difference

Budget

Actual Costs

Favorable Unfavorable Neither Favorable nor Unfavorable

DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs

DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

(b) Prepare a flexible budget performance report, assuming that the company worked 8,500 direct labor hours during the month. (List variable costs before fixed costs.)

MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2020

Difference

Budget

Actual Costs

Favorable Unfavorable Neither Favorable nor Unfavorable

DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs

DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

$

$

$

UnfavorableFavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Depreciation Direct Labor Hours Fixed Costs Indirect Labor Indirect Materials Property Taxes Supervision Total Costs Total Fixed Costs Total Variable Costs Utilities Variable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable