Problem 22-1A

Bumblebee Company estimates that 402,100 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		$91,800		Indirect labor		$184,966
Depreciation		69,960		Indirect materials		104,546
Insurance		32,040		Repairs		64,336
Rent		22,560		Utilities		60,315
Property taxes		22,680		Lubricants		40,210
		$239,040				$454,373

It is estimated that direct labor hours worked each month will range from 20,400 to 30,000 hours. During October, 20,400 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: Supervision $7,650, Depreciation $5,830, Insurance $2,615, Rent $1,880, and Property taxes $1,890. Variable overhead costs: Indirect labor $10,484, Indirect materials, $4,874, Repairs $3,214, Utilities $3,370, and Lubricants $2,380. (a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,200 direct labor hours over the relevant range for the year ending December 31, 2017.

(b) Prepare a flexible budget report for October. (List variable costs before fixed costs.)

BUMBLEBEE COMPANY Packaging Department Monthly Manufacturing overhead Flexible Budget For the Year 2017