Speier Company estimates that 240,000 direct labor hours will be worked during 2017 in the Assembly Department. On this basis, the following budgeted manufacturing overhead data are computed.

Variable Overhead Costs			Fixed Overhead Costs
Indirect labor	$ 72,000		Supervision	$ 75,600
Indirect materials	48,000		Depreciation	30,000
Repairs	36,000		Insurance	12,000
Utilities	24,000		Rent	9,600
Lubricants	12,000		Property taxes	6,000
	$192,000			$133,200

It is estimated that direct labor hours worked each month will range from 18,000 to 24,000 hours. During Jan. 20,000 direct labor hours were worked and these overhead costs were incurred.

Variable Overhead Costs			Fixed Overhead Costs
Indirect labor	$ 6,200		Supervision	$ 6,300
Indirect materials	3,600		Depreciation	2,500
Repairs	2,300		Insurance	1,000
Utilities	1,700		Rent	850
Lubricants	1,050		Property taxes	500
	$14,850			$11,150

Instructions

(a) Prepare a monthly flexible manufacturing overhead budget for each increment of 2,000 direct labor hours over the relevant range for the year ending December 31, 2017.

(b) Prepare a manufacturing overhead budget report for January.

(a) SPEIER COMPANY

Flexible Monthly Manufacturing Overhead Budget

Assembly Department

For the Year 2017

Activity Level Direct Labor Hours	18,000	20,000	22,000	24,000
Variable Costs:
Total Variable Costs
Fixed Costs:
Total Fixed Costs
Total Costs

(b) SPEIER COMPANY

Manufacturing Overhead Budget Report (Flexible)

Assembly Department

For the Month Ended January 31, 2017

Activity Level Direct Labor Hours	Budget at 20,000 DLH	Actual Costs 20,000 DLH	Favorable Unfavorable
Variable Costs:
Total Variable Costs
Fixed Costs:
Supervision
Depreciation
Insurance
Rent
Property Taxes
Total Fixed Costs
Total Costs