Problem 10-2A a-b, d (Video) Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Rate per Direct Labor Hour Variable costs Annual Fixed Costs $0.42 Supervision $44,160 0.53 Depreciation 18,960 Indirect labor Indirect materials Factory utilities Factory repairs 0.31 Insurance 16,560 0.21 Rent 27,720 The master overhead budget was prepared on the expectation that 475,300 direct labor hours will be worked during the year. In June, 45,300 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.44, indirect materials $0.52, factory utilities $0.34, and factory repairs $0.25. Fixed: same as budgeted. Your answer is partially correct. Try again. (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 41,300 to 56,900 direct labor hours. Use increments of 5,200 direct labor hours. (List variable costs before fixed costs.) ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2020 Activity Level Direct Labor Hours 41,300 46,300 51,900 56,900 Variable costs F Indirect Labor 17,346) 19,446 21,798 23,898 Indirect Materials 21,889 24,539 27,507 30,157 Factory Utilities . 12,803 14,353 16,089 17,639 Factory Repairs 8,673 9,723 10,899 11,949 Total Variable Costs 60,711 68,061 76,293 83,643 Fixed Costs Supervision + 3,680 3,680 3,680 3,680 - Depreciation + 1,580 1,580 1,580 1,580 Insurance 1,380 1,380 1,380 1,380 Rent . 2,310 2,3101 2,310 2,310 Total Fixed Costs 8,950 8,950 8,950 8,950 Total Costs 69,661 77,011 85,243 $ 92,593 (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) ZELMER COMPART Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs Direct Labor Hours 45300 45300 Variable Costs Indirect Labor 19026 19932 906|| Unfavorable Indirect Materials 24009 23556 453 Favorable E Factory Utilities 14043 154021 1359 Unfavorable E Factory Repairs 9513 11325 1812 Unfavorable Total Variable Costs 66591 70,215 3624| Unfavorable Fixed Costs Supervision 3680 3680 o Neither Favorable nor Unfavorable E Depreciation + 1580 1580 ol Neither Favorable nor Unfavorable Insurance . 1380 1380 o Neither Favorable nor Unfavorable Rent 2310 2310 o Neither Favorable nor Unfavorable - Total Fixed Costs 8,950 8,950 0 Neither Favorable nor Unfavorable : Total Costs 75,541 79,165 3,624 Unfavorable Your answer is partially correct. Try again. State the formula for computing the total budgeted costs for the Ironing Department. (Round varlable cost per unit to 2 decimal places, e.g. 1.55.) 2 , The formula is total fixed costs 8,950 1.47 + variable costs of $ per direct labor hour. Click if you would like to Show Work for this question: Open Show Work