Problem 14-2A Ayayai Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. 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 Indirect labor $0.40 Supervision Depreciation Indirect materials 0.54 $47,640 19,200 12,240 27,720 0.30 Insurance Factory utilities Factory repairs 0.20 Rent The master overhead budget was prepared on the expectation that 484,800 direct labor hours will be worked during the year. In June, 40,400 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.43, indirect materials $0.52, factory utilities $0.33, and factory repairs $0.24. Fixed: same as budgeted. Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2017, assuming production levels range from 42,700 to 60,100 direct labor hours. Use increments of 5,800 direct labor hours. (List variable costs before fixed costs.) AYAYAI COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department $ $ $ $ * - * $ $ $ Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) AYAYAI COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs Budget Actual Costs nor Unfavorable A A A $ % + + 4 A A A 4 A A A 4 . 4 $ + A State the formula for computing the total budgeted costs for the Ironing Department. (Round variable cost per unit to 2 decimal places, e.g. 1.55.) The formula is $ + total variable costs of $ per direct labor hour