The controller for Muir Company's Salem plant is analyzing overhead in order to determine appropriate drivers for use in flexible budgeting. She decided to concentrate on the past $12$ months since that time period was one in which there was little important change in technology, product lines, and so on$.$ Data on overhead costs, number of machine hours, number of setups, and number of purchase orders are in the following table.

Month Overhead Costs Machine Hours Number of

Setups Number of

Purchase Orders

January $ $32,2961,00020216$

February $31,55093018250$

March $36,2801,10021300$

April $36,8671,05023270$

May $36,7901,17022285$

June $37,8001,20025240$

July $40,0241,23527237$

August $39,2561,19024303$

September $33,8001,07020255$

October $33,7791,21022195$

November $37,2251,20723270$

December $27,5001,08415150$

Totals $$423,16713,4462602,971$

Required:

Question Content Area

$1.$ Calculate an overhead rate based on machine hours using the total overhead cost and total machine hours. $($Round the overhead rate to the nearest cent and predicted overhead to the nearest dollar.$)$ Use this rate to predict overhead for each of the $12$ months.

Overhead rate: $fill in the blank $82$ab$53$f$46073067\_1$

$31\mathrm{.}47$

per machine hour

Feedback Area

Feedback

A flexible budget for overhead will compare the actual overhead costs to the predicted $($budgeted$)$ costs. Variances are calculated and then determined if favorable or unfavorable.

Question Content Area

Prepare a flexible budget for overhead for the $12$ months. If there is no variance, enter $"0"$ for the amount and select $"$NA$"$ in the last column. Enter all amounts as postive values.

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Muir Company Flexible Budget for Overhead

Month Predicted Overhead Actual Overhead Variance

January $Unfavorable

$31,470$

$Unfavorable

$32,296$

$Unfavorable

$826$

Unfavorable

February Unfavorable

$29,267$

Unfavorable

$31,550$

Unfavorable

$-2,282$

Unfavorable

March Unfavorable

$34,617$

Unfavorable

$36,280$

Unfavorable

$-1,663$

Unfavorable

April Unfavorable

$33,043$

Unfavorable

$36,867$

Unfavorable

$-3,823$

Unfavorable

May Favorable

$36,819$

Favorable

$36,790$

Favorable

$29$

Favorable

June Unfavorable

$37,764$

Unfavorable

$37,800$

Unfavorable

$-36$

Unfavorable

July Unfavorable

$38,865$

Unfavorable

$40,024$

Unfavorable

$-1,158\mathrm{.}6$

Unfavorable

August Unfavorable

$37,449$

Unfavorable

$39,256$

Unfavorable

$-1,807$

Unfavorable

September Unfavorable

$33,672$

Unfavorable

$33,800$

Unfavorable

$-127$

Unfavorable

October Favorable

$38,078$

Favorable

$33,779$

Favorable

$4,299\mathrm{.}7$

Favorable

November Favorable

$37,984$

Favorable

$37,225$

Favorable

$759\mathrm{.}29$

Favorable

December Favorable

$34,113$

Favorable

$27,500$

Favorable

$6,613\mathrm{.}48$

Favorable

Totals $Unfavorable

$Unfavorable

$423,167$

$Unfavorable

$-21\mathrm{.}38$

Unfavorable