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Oriole, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows: Indirect labor
Oriole, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows:
Indirect labor | $5.00 | |||
Indirect materials | 2.50 | |||
Maintenance | 0.50 | |||
Utilities | 0.30 | |||
Fixed overhead costs per month are: | ||||
Supervision | $1,250 | |||
Insurance | 450 | |||
Property taxes | 650 | |||
Depreciation | 1,850 |
The company believes it will normally operate in a range of 4,500 to 8,500 machine hours per month. During the month of August, 2022, the company incurs the following manufacturing overhead costs:
Indirect labor | $30,550 | ||
Indirect materials | 17,550 | ||
Maintenance | 3,030 | ||
Utilities | 2,060 | ||
Supervision | 1,540 | ||
Insurance | 450 | ||
Property taxes | 650 | ||
Depreciation | 1,960 |
Prepare a flexible budget report, assuming that the company used 6,500 machine hours during August. (List variable costs before fixed costs.)
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