Part 1:What is the flexible budget formula for factory overhead?2400/300 = 8

Step 1:Answer the following:

What is the DLH for the highest pair?

What is the Factory Overhead amount for the highest pair?

What is the DLH for the lowest pair?

What is the Factory Overhead amount for the lowest pair?

Step 2: What is the Variable rate?To calculate:

(amount highest pair amount lowest pair) / (DLH highest pair DLH lowest pair) = $x.xx per DLH

Step 3: Compute the fixed cost portion:

High

Low

Factory Overhead

$x,xxx

$x,xxx

Variable expense ($x.xx per DLH) x (DLH highest pair)

(x,xxx)

($x.xx per DLH) x (DLH lowest pair)

(x,xxx)

Fixed cost

$xxx

$xxx

CONCLUSION:Flexible budget formula is: $xxx fixed cost plus $x.xx per direct labor hour

Question to answer for Part 1: As a HR manager, how might you make use of this information in the decisions being made about employee headcountincluding hiring and staffing choices?

Part 2:Prepare an analysis to fix the problem she perceived with employee productivity and efficiency.

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

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?