Question
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.
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 materials | 0.90 | |
Utilities | 0.40 |
Fixed overhead costs per month are Supervision $3,700, Depreciation $1,700, and Property Taxes $800. The company believes it will normally operate in a range of 5,7009,300 direct labor hours per month. Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs.
Variable Costs | Fixed Costs | |||||
---|---|---|---|---|---|---|
Indirect labor | $7,870 | Supervision | $3,700 | |||
Indirect materials | 7,120 | Depreciation | 1,700 | |||
Utilities | 2,780 | Property taxes | 800 |
(a) Prepare a flexible budget performance report, assuming that the company worked 8,100 direct labor hours during the month. (List variable costs before fixed costs.)
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