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 system for 2014. 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.

Variable costs	Rate per Direct Labor Hour	Annual Fixed Costs
Indirect labor	$0.40	Supervision	$44,364
Indirect materials	0.51	Depreciation	14,568
Factory utilities	0.34	Insurance	13,500
Factory repairs	0.23	Rent	24,780

The master overhead budget was prepared on the expectation that479,200direct labor hours will be worked during the year. In June,42,000direct labor hours were worked. At that level of activity, actual costs were as shown below. Variableper direct labor hour:Indirect labor $0.43, Indirect materials $0.49, Factory utilities $0.38, and Factory repairs $0.28. Fixed:same as budgeted.

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(a)Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2014, assuming production levels range from38,200to53,800direct labor hours. Use increments of5,200direct labor hours.(List variable costs before fixed costs.)

ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2014
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs	$	$	$	$
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs	$	$	$	$

(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, 2014
Difference
Budget	Actual Costs	Favorable F Unfavorable U Neither Favorable nor Unfavorable N
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs	$	$	$	FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs				FUN
Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFactory RepairsFactory UtilitiesFixed CostsIndirect LaborIndirect MaterialsInsuranceRentSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable Costs	$	$	$	FUN

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State the formula for computing the total budgeted costs for Ironing Department.(Round variable cost per unit to 2 decimal places, e.g. $1.55.)

The formula

=

$ + total variable costs of $ per direct labor hour.