Waterways Corporation is continuing its budget preparations. Waterways had the following static budget and actual overhead for March. (Refer to Waterways 9 if you are uncertain about variable versus fixed costs.)

Waterways Corporation Waterways Corporation

Manufacturing Overhead Budget Manufacturing Overhead Costs (Actual)

(Static) For the Month of March For the Month of March

Budgeted Production (Units)	118,000		Production in units	118,500
Indirect materials	$ 5,900		Indirect materials	$ 5,910
Indirect labor	14,160		Indirect labor	14,195
Utilities	11,800		Utilities	11,880
Maintenance	8,260		Maintenance	8,275
Salaries	42,000		Salaries	42,100
Depreciation	16,800		Depreciation	16,800
Property taxes	3,000		Property taxes	3,000
Insurance	1,200		Insurance	1,200
Janitorial	1,500		Janitorial	1,650
Total budgeted costs	$104,620		Total costs	$105,010

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

Instructions:

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

(1) 115,000 units

(2) 116,000 units

(3) 117,000 units

(4) 118,000 units

(5) 119,000 units

b. Prepare a flexible budget performance 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.