Lowell Companys manufacturing overhead budget for the first quarter of 2014 cont

Question

Lowell Companys manufacturing overhead budget for the first quarter of 2014 contained the following data Variable costs              fixed costs

indirect materials 11316     supervisory salaries   36724  

indirect labor 10926               depreciation 6575

utilities 7294                           property taxes and insurance 7078

maintenance 5617                   maintenance        5617     actual variable costs were: indirect materials 14965 indirect labor 9216 utilities 9181   and maintenance 5076. actual fixed costs equaled budgeted costs except for property taxes and insurance, which were 9096 the actual activity level equaled the budgeted level   all costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance             a)prepare a manufacturing overhead flexible budget report for the first quarter              Lowell company manufacturing over head flexible budget report for the quarter ended march 31 2014   

                   budget                ac tual                  neither favorable or unfavorable

Explanation / Answer

Lowell company manufacturing overhead flexible budget report for the quarter ended March 31 2014:

Budgeted Actual Variance F/ U Variable costs Indirect materials 11,316 14,965 3,649 U Indirect labor 10,926 9,216 1,710 F Utilities 7,294 9,181 1,887 U Maintenance 5,617 5,076 541 F Fixed costs Supervisory salaries 36,724 36,724 Nil NA Depreciation 6,575 6,575 Nil NA Property taxes and insurance 7,078 9,096 2,018 U 85,530 90,833 5,303 U

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