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 $0.43 Supervision $45,120 Indirect materials Factory utilities Factory repairs 0.52 Depreciation 18,000 0.33 Insurance 17,640 0.21 Rent 27,720 The master overhead budget was prepared on the expectation that 480,800 direct labor hours will be worked during the year. In June, 46,500 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.47, indirect materials $0.50, factory utilities $0.37, and factory repairs $0.25. Fixed: same as budgeted. ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2020 (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 38,700 to 53,400 direct labor hours. Use increments of 4,900 direct labor hours. (List variable costs before fixed costs.) A A LA SA A A A $ (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) F F +A ZELMER COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2020 Budget Actual Costs A A Differ Favor Unfavo Neither Fa nor Unfa $ +A $ Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2020, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below. Manufacturing Overhead Actual Budget Individual costs-Cutting Department-Seattle Indirect labor $73,500 $69,700 Indirect materials 48,100 45,700 Maintenance Utilities Supervision 20,700 17,800 19,900 16,800 22,400 20,000 $184,600 $170,000 Total costs Shaping Department-Seattle $157,900 $148,500 Finishing Department-Seattle 210,800 203,500 Denver division 678,100 672,500 San Diego division 722,500 715,500 Additional overhead costs were incurred as follows: Seattle division production manager-actual costs $53,000, budget $51,500; vice president of production-actual costs $65,500, budget $64,200; president-actual costs $76,900, budget $74,100. These expenses are not allocated. The vice presidents who report to the president, other than the vice president of production, had the following expenses. Vice President Actual Budget Marketing $134,000 $130,200 Finance 109,100 104,900 Total Prepare the Manufacturing overhead-Cutting Department manager-Seattle division responsibility report. To Cutting Department Manager-Seattle Division Controllable Costs: +A $ AA Budget EA $ AA Actual Month: January Favorable Unfavorable Neither Favorable nor Unfavorable A +A Prepare the Manufacturing overhead-Seattle division manager responsibility report. To Division Production Manager-Seattle Controllable Costs: Seattle Division Departments: Budget $ Total $ +A Actual $ A A Month: January Favorable Unfavorable Neither Favorable nor Unfavorable A +A $