Problem 25-02A a-b, d (Part Level Submission) (Video) Sheffield Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. 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 Annual Fixed Costs $0.44 0.55 Indirect labor Indirect materials Factory utilities Factory repairs Supervision Depreciation Insurance $41,040 16,200 13,320 30,960 0.32 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) Your answer is partially correct. Try again. (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, 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.) SHEFFIELD COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2020 Activity Level Direct Labor Hours 38,300 42,500 46,700 50,900 Variable Costs Indirect Labor 16,852 18,700 20,548 22,396 $ $U Indirect Materials 21,065 23,375 25,685 27,995 Factory Utilities 12,256 13,600 14,944 16,288 Factory Repairs 9,192 10,200 11,208 12,216 Total Variable Costs V 59,365 65,875 72,385 78,895 Fixed Costs Supervision 41,040 41,040 41,040 41,040 Depreciation 16,200 16,200 16,200 16,200 Insurance 13,320 13,320 13,320 13,320 X Rent 30,960 30,960 30,960 30,960 Total Fixed Costs 89,532 89,532 89,532 89,532 Total Costs 148,897 155,407 161,917 168,427 (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) SHEFFIELD COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs Activity Level 37,500 37,500 Variable Costs Indirect Labor 16,500 17,625 -1,125 Unfavorable $1 Indirect Materials 20,625 20,250 375 Favorable Factory Utilities 12,000 13,125 -1,125 Unfavorable Factory Repairs 9,000 10,875 -1,875 Unfavorable Total Variable Costs 58,125 61,875 -3,750 Unfavorable Fixed Costs Supervision 41,040 41,040 0 Neither Favorable nor Unfavorable v Depreciation 16,200 16,200 0 Neither Favorable nor Unfavorable v Insurance 13,320 13,320 0 Neither Favorable nor Unfavorable Rent 30,960 30,960 o Neither Favorable nor Unfavorable v Total Fixed Costs 89,532 89,532 0 Neither Favorable nor Unfavorable v Total Costs 147,657 151,407 -3,750 Unfavorable