NOTE: The problem is that the budget is based on an activity level of 10,000 units and 12,000 units were produced. This report is useless. Prepare a flexible budget to present to your boss. [Complete the calculations in the chart below]

HoneyBear Confections Manufacturing Overhead Flexible Budget Report For the Month Ended June, 20XX

NOTE: The problem is that the budget is based on an activity level of 10,000 units and 12,000 units were produced. This report is useless. Prepare a flexible budget to present to your boss. [Complete the calculations in the chart below]

HoneyBear Confections Manufacturing Overhead Flexible Budget Report For the Month Ended June, 20XX

HoneyBear Confections	Budget	Actual	Variance (U of F)
Production in bags of candy	10,000	12,000	2,000F
Costs:
Indirect labor	$26,000	$31,200	$5,200U
Supplies	$25,000	$29,500	$4,500U
Utilities	$19,000	$22,500	$3,500U
	$70,000	$83,200	$13,200U

Budgeted production 10,000 bags (**use for calculations column 2 below);

and Actual production 12,000 bags shown.

Column 1	**Column 2: Flexible Budget Formula	Column 3: Flexible Budget 12,000 bags	Actual 12,000 bags	Variance (U or F)
Costs:	See Part 2 chart in instructions to calculate this column.	Use answer calculated in column 2 for each row, multiply by 12,000.	Given on chart in instructions	For each row, subtract answer for column 4 from column 3. Then determine if F or U.
Indirect labor	Budget cost indirect labor / Budgeted production in bags of candy = $x.xx	($x.xx) x (12,000) = $xx,xxx	$31,200	$x.xx
Supplies	Budget cost supplies / Budgeted production in bags of candy = $x.xx	($x.xx) x (12,000) = $xx,xxx	$29,500	$xxx.xx F or U
Utilities	Budget cost utilities / Budgeted production in bags of candy = $x.xx	($x.xx) x (12,000) = $xx,xxx	$22,500	$xxx.xx F or U
	$x.xx	$xx,xxx	$83,200	$xxx.xx F or U

Question to answer for Part 2: After reviewing the information and making the necessary calculations, what would you recommend?