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 | $1.40 | |
---|---|---|
Indirect materials | 0.80 | |
Utilities | 0.30 |
Fixed overhead costs per month are Supervision $3,800, Depreciation $1,700, and Property Taxes $500. The company believes it will normally operate in a range of7,400-11,600direct labor hours per month. Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs.
Variable Costs | Fixed Costs | |||||
---|---|---|---|---|---|---|
Indirect labor | $14,010 | Supervision | $3,800 | |||
Indirect materials | 8,030 | Depreciation | 1,700 | |||
Utilities | 2,650 | Property taxes | 500 |
(a) a flexible budget performance report, assuming that the company worked10,200direct labor hours during the month
(b) a flexible budget performance report, assuming that the company worked9,700direct labor hours during the month.
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