Rainbow Ltd's manufacturing overhead budget for the first quarter of the current year was prepared on the basis of planned output of 4,000 units and contained the following data:

Variable costsFixed costs

Indirect materials$12,000Supervisor salaries$36,000

Indirect labour10,000Depreciation7,000

Utilities8,000Taxes and insurance8,000

Maintenance5,000Maintenance5,000

Actual variable costs were: indirect materials $13,800, indirect labour $9,600, utilities $8,700, and maintenance $4,200.

Actual fixed costs equalled budgeted fixed costs except for taxes and insurance which were $8,400.

Actual output for the quarter was 4,500 units.

All costs are considered controllable by the production department manager, except for depreciation, and taxes and insurance.

Requirements

(a)Prepare a flexible budget manufacturing overhead budget report for the quarter. (Marks 8)

(b)Which items from the budget report would be included in a responsibility report prepared for the production department manager? (Marks 2)