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

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Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Budgeted variable manufacturing overhead costs per direct labor hour are as follows. Budgeted 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 7,000-10,000 direct labor hours per month. Assume that in July 2022, Myers Company incurs the following manufacturing overhead costs, case (a) case (b) Comment on the findings of manufacturing overhead flexible budget report using the two different direct labor hours 9,000 and 8,500. The difference between the fleoble budget and the actual costs for each variable cost is unf awourable, indicating that Myers Company incurred higher-than expected costs for indirect labour, indirect materials, and utilities. The total var iable cost difference is $1,100 unfavourable. The total fuxed cost difference is favourable, indicating that Myers Company incurred lower-than-expected costs for supervision, depreciation, and property taxes. However, the favourable fixed cost difference of $0 is not enough to oltset the unfawourable variable cost difference of $1,100. Therefore, the overall difference between the flexibie budget and the actual costs is unfawourabie $1,100

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