Question text

Gentry Company uses a flexible budget for manufacturing overhead based on machine hours.

Variable overhead costs per machine hour are as follows:

Indirect Labor	$5.00
Indirect Materials	2.50
Maintenance	.50
Utilities	.30

Fixed Overhead costs per month are as follows:

Supervision	$600
Insurance	200
Property Taxes	300
Depreciation	900

During the month of August 2018, the company incurs the following actual manufacturing costs for 3000 direct labor hours worked:

Indirect Labor	$14,000
Indirect Materials	8,100
Maintenance	1,400
Utilities	950
Supervision	720
Insurance	200
Property Taxes	300
Depreciation	930

Instructions: Prepare a flexible budget for 3,000 machine hours and flexible budget report for the month of August in the template provided. Be sure to mark your difference as F-Favorable or U-Unfavorable.

Bogart Company

Manufacturing Overhead Flexible Budget Report

For the month ended August 31, 2018

			Difference
	Budget at	Actual at	Favorable F
	3,000 hrs	3,000 hrs	Unfavorable U
Variable Costs:
Indirect Labor
Indirect Materials
Maintenance
Utilities
Total Variable Costs
Fixed Costs:
Supervision
Insurance
Property Taxes
Depreciation
Total Fixed Costs
Total Costs