WATERWAYS CONTINUING PROBLEM

(This is a continuation of the Waterways Problem from Chapters 19 through 23.)

WCP24 Waterways Corporation is continuing its budget preparations. Waterways had the following static budget and overhead costs for March.

Waterways Corporation Waterways Corporation

Manufacturing Overhead Budget Manufacturing Overhead Costs

(Static) (Actual)

For the Month of March For the Month of March

Budgeted production in units 117,500 Production in units 118,500

Budgeted costs Costs

Indirect materials $ 7,050 Indirect materials $ 7,100

Indirect labor 11,750 Indirect labor 11,825

Utilities 10,575 Utilities 10,700

Maintenance 5,875 Maintenance 5,900

Salaries 42,000 Salaries 42,000

Depreciation 16,800 Depreciation 16,800

Property taxes 2,500 Property taxes 2,500

Insurance 1,200 Insurance 1,200

Janitorial 1,300 Janitorial 1,300

Total budgeted costs $99,050 Total costs $99,325

Waterways produced 118,500 units in March rather than the budgeted number of units.

Instructions

(a) Prepare a flexible overhead budget based on the following amounts produced.

(1) 115,500 units

(2) 116,500 units

(3) 117,500 units

(4) 118,500 units

(5) 119,500 units

(b) Prepare a flexible budget report showing the differences (favorable and unfavorable) in manufacturing overhead costs for the month of March.

(c) Prepare a responsibility report for the manufacturing overhead for March, assuming only variable costs are controllable.