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 2022. 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.

Variable costs		Rate per Direct Labor Hour		Annual Fixed Costs
Indirect labor		$0.43		Supervision		$47,040
Indirect materials		0.51		Depreciation		20,400
Factory utilities		0.31		Insurance		13,560
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. Variableper 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, 2022, assuming production levels range from 43,300 to 57,400 direct labor hours. Use increments of 4,700 direct labor hours.

SUNLAND COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2022

(b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.)

SUNLAND COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2022