Problem 24-2A Managerial Accounting

Problem 24-2A Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control syetem for 2017, Theollwng dste 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 Indirect laber Indirect matenals Factory utilities Factory reps rs $46,800 16,920 14,760 28,080 50.42 Supervisicn 0.55 Depreciation 0.32 nsurance The master overhead budget was prepared on the expectation that 479,200 direct labor hours will be worked during the year. In lune, 46,100 direct labor hours were worked. At that level of activity, actual costs were as shown below. Vaniable-per direct labor hour: indirect labor 0.44, indirect materials $0.54, factory utilities $0.35, and factory repairs $0.24 Fixed: same as budgeted (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2017, assuming producticn levels range from 35,000 to 52,400 direct labor hours. Use increments of 5,800 direct labor hours, (List variable costs before fixed costs.) ZULMER COMPANY Monthly Hanufacturing Overhead Flexible Budget r the Year 2017 (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs belore fixed costs.) ZELMER COMPANY Ironing Drpartment Manufacturing Overbead Hexible Budget Report For the Honth Ended lune 30, 2017 Neither Favorable tate the formula for computing the total budgeted costs for the troning Department. (Round variable cost per unit to 2 decimal places, e.g. .55.) The formmula is +total variable costs of s per direct labor hour