Not Graded

Flexible Budget Application The cutting department of Liberty Manufacturing Company operated during September 2016 with the following manufacturing overhead cost budget based on 6,000 hours of monthly productive capacity:

Liberty Manufacturing Company Cutting Department Overhead Budget (6,000 Hours) For the Month of September 2016
Variable costs:
Factory supplies				$48,000
Indirect labor				72,000
Utilities (usage charge)				36,000
Patent royalties on secret process				144,000
Total variable overhead					$300,000
Fixed costs:
Supervisory salaries				96,000
Depreciation on factory equipment				140,000
Factory taxes				40,000
Factory insurance				24,000
Utilities (base charge)				32,000
Total fixed overhead					332,000
Total manufacturing overhead					$632,000

The cutting department was operated for 5,460 hours during September and incurred the following manufacturing overhead costs:

Factory supplies				$40,800
Indirect labor				67,600
Utilities (usage factor)				38,100
Utilities (base factor)				32,000
Patent royalties				134,400
Supervisory salaries				96,000
Depreciation on factory equipment				140,000
Factory taxes				43,800
Factory insurance				27,000
Total manufacturing overhead incurred				$619,700

Using a flexible budgeting approach, prepare a performance report for the cutting department for September 2016, comparing actual overhead costs with budgeted overhead costs for 5,460 hours. Separate overhead costs into variable and fixed components and show the amounts of any variances between actual and budgeted amounts.

Do not use negative signs with your answers below. Do not round until your final answer. Round answers to nearest whole number, if applicable. Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers.

Liberty Manufacturing Company Polishing Department Performance Report - Manufacturing Overhead For the Month Ended September 30, 2016
			Actual Costs	Budget (5,460 hours)	Variances
Variable costs:
Factory supplies			Answer	Answer	Answer	AnswerFU
Indirect labor			Answer	Answer	Answer	AnswerFU
Utilities			Answer	Answer	Answer	AnswerFU
Patent royalties			Answer	Answer	Answer	AnswerFU
Total variable overhead			Answer	Answer	Answer	AnswerFU
Fixed costs:
Supervisory salaries			Answer	Answer	Answer	AnswerFU
Depreciation on equipment			Answer	Answer	Answer
Factory taxes			Answer	Answer	Answer	AnswerFU
Factory insurance			Answer	Answer	Answer
Utilities			Answer	Answer	Answer	AnswerFU
Total fixed overhead			Answer	Answer	Answer	AnswerFU
Total overhead costs			Answer	Answer	Answer	AnswerFU