Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. 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 $0.40 Supervision $43,680 Indirect materials 0.51 Depreciation 17,160 Factory utilities 0.34 Insurance 12,480 Factory repairs 0.24 Rent 23,040 The master overhead budget was prepared on the expectation that 484,200 direct labor hours will be worked during the year. In June, 38,600 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variableper direct labor hour: indirect labor $0.43, indirect materials $0.50, factory utilities $0.38, and factory repairs $0.29. Fixed: same as budgeted.

(a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 42,400 to 57,400 direct labor hours. Use increments of 5,000 direct labor hours. (List variable costs before fixed costs.)

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