- Your answer is partially correct. Prepare a flexible budget performance report, assuming that the company worked 11.200 direct labor hours during the month. (List variable costs before fixed costs.) AYAYAI COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2017 Difference Favorable/Unfavorable Actual Costs Neither Favorable nor Unfavorable 11200 11200 Budget Direct Labor Hours Variable Costs Indirect Labor 1344000 1392000 Unfavorable Indirect Materials 896000 932000 Unfavorable Utilities 448000 424000 Favorable Total Variable Costs 2688000 2748000 Unfavorable Fixed Costs Supervision 360000 360000 Neither Favorable nor Unfavorable Current Attempt in Progress Ayayai Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor Indirect materials Utilities $1.20 0.80 0.40 Fixed over head costs per month are Supervision $3,600, Depreciation $1,000, and Property Taxes $900. The company believes it will normally operate in a range of 8.000-13.700 direct labor hours per month. Assume that in July 2017. Ayayai Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor $13,920 Supervision $3,600 Indirect materials 9.320 Depreciation 1,000 Utilities 4,240 Property taxes 900