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**PLEASE ANSWER A & B** Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct

**PLEASE ANSWER A & B**

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

Indirect labor $1.20
Indirect materials 0.80
Utilities 0.40

Fixed overhead costs per month are Supervision $3,500, Depreciation $1,300, and Property Taxes $700. The company believes it will normally operate in a range of 5,5008,500 direct labor hours per month. Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs.

Variable Costs

Fixed Costs

Indirect labor $8,720 Supervision $3,500
Indirect materials 5,830 Depreciation 1,300
Utilities 2,590 Property taxes

700

(a) Prepare a flexible budget performance report, assuming that the company worked 7,500 direct labor hours during the month.

(b) Prepare a flexible budget performance report, assuming that the company worked 6,800 direct labor hours during the month.

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