Problem 22-1A

Bumblebee Company estimates that 300,000 direct labor hours will be worked during the coming year, 2017, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data are computed for the year.

Fixed Overhead Costs				Variable Overhead Costs
Supervision		$84,000		Indirect labor		$120,000
Depreciation		66,000		Indirect materials		60,000
Insurance		24,000		Repairs		30,000
Rent		18,000		Utilities		45,000
Property taxes		12,000		Lubricants		15,000
		$204,000				$270,000

It is estimated that direct labor hours worked each month will range from 20,000 to 26,000 hours. During October, 20,000 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: Supervision $7,000, Depreciation $5,500, Insurance $1,975, Rent $1,500, and Property taxes $1,000. Variable overhead costs: Indirect labor $8,970, Indirect materials, $3,700, Repairs $1,960, Utilities $3,250, and Lubricants $1,240. (a) Prepare a monthly manufacturing overhead flexible budget for each increment of 2,000 direct labor hours over the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)

(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 2,000 direct labor hours over the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.) BUMBLEBEE COMPANY Packaging Department Monthly Manufacturing Overhead Flexible Budget For the Year 2017 (b) Prepare a flexible budget report for October. (List variable costs before fixed costs.) BUMBLEBEE COMPANY Packaging Department Manufacturing Overhead Flexible Budget Report For the Month Ended October 31, 2017 Difference Favorable Unfavorable Neither Favorable Budget Actual Costs nor Unfavorable