Problem 22-1A

Cook Company estimates that 387,900 direct labor hours will be worked during the coming year, 2014, 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		$84,360		Indirect labor		$182,313
Depreciation		72,480		Indirect materials		100,854
Insurance		35,280		Repairs		69,822
Rent		29,040		Utilities		73,701
Property taxes		16,560		Lubricants		19,395
		$237,720				$446,085

It is estimated that direct labor hours worked each month will range from 27,500 to 36,800 hours. During October, 27,500 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: supervision $7,030, depreciation $6,040, insurance $2,889, rent $2,420, and property taxes $1,380. Variable overhead costs: indirect labor $13,967, indirect materials, $6,683, repairs $4,903, utilities $5,541, and lubricants $1,686.

Prepare a monthly manufacturing overhead flexible budget for each increment of 3,100 direct labor hours over the relevant range for the year ending December 31, 2014. (List variable costs before fixed costs.) Prepare a flexible budget report for October. (List variable costs before fixed costs.) COOK COMPANY