Sunland 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 Indirect labor $0.43 Supervision $47,040 Indirect materials 0.51 Depreciation 20,400 0.31 13,560 Factory utilities Insurance Factory repairs 0.23 Rent 25,200 The master overhead budget was prepared on the expectation that 483,600 direct labor hours will be worked during the year. In June, 47,000 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 $0.50, factory utilities $0.34, and factory repairs $0.27. Fixed: same as budgeted. (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 43,300 to 57,400 direct labor hours. Use increments of 4,700 direct labor hours. (List variable costs before fixed costs.) (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable SUNLAND COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2020 Difference Favorable Unfavorable Neither Favorable Budget Actual Costs nor Unfavorable 47,000 47,000 Direct Labor Hours Variable Costs 22,090 20,210 1,880 Indirect Labor Unfavorable $ 470 Indirect Materials Favorable 23,970 23,500 1,410T Unfavorable 14,570 15,980 Factory Utilities 1,880 10,810 Unfavorable Factory Repairs 69,560 Total Variable Costs Unfavorable Fixed Costs 3,920 Supervision 3,920 Neither Favorable nor Unfavorable 1,700 Depreciation Neither Favorable nor Unfavorable 1,700 Insurance 1,130 1,130 Neither Favorable nor Unfavorable Neither Favorable nor Unfavorable 2,100 2,100 Rent 8,850 8,850 Total Fixed Costs Neither Favorable nor Unfavorable 78,410 $ Total Costs Unfavorable PE