Problem 24-2A (Part Level Submission) Zelmer 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 Indirect labor Indirect materials Factory utilities Factory repairs Annual Fixed Costs $41,040 16,200 13,320 30,960 $0.44 Supervision 0.55 Depreciation 0.32 Insurance 0.24 Rent The master overhead budget was prepared on the expectation that 479,500 direct labor hours will be worked during the year. In June, 37,500 direct labor hours were worked. At that level of activity, actual costs were as shown below Variable-per direct labor hour: indirect labor $0.47, indirect materials $0.54, factory utilities $0.35, and factory repairs $0.29 Fixed: same as budgeted (a) & (b) (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2017, assuming production levels range from 38,300 to 50,900 direct labor hours. Use increments of 4,200 direct labor hours. (List variable costs before fixed costs.) ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2017 (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) ZELMER COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs