Zelmer Company data were used in developing the master Sales have grown rapidly

Question

Zelmer Company data were used in developing the master Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2014. The following overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. per The master overhead budget was prepared on the expectation that 476,200 direct labor hours will be worked during the year. In June, 46,180 direct labor hours were worked. At that level of activity, actual costs were as shown below. Indirect labor Indirect materials Factory utilities Factory repairs $44,172 0.52 Depreciation 0.33 Insurance 0.25 Rent 18,816 14,508 Variable-per direct labor hour: indirect labor $0.44, indirect materials $0.49, factory utilities $0.36, and factory repairs $0.31. 24,864 Fixed: same as budgeted. ZELMER COMPANY Monthly Overhead Flexible Budget Ironing Deportment 23575 29900 8975 Indirect Labor 23036 27612 17523 1327 2532 1607 Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) ZELMER COMPANY Activity Level 968 46180 Indirect Labor 16270 20319 ndirect Materia 206 22628 199 Factory Utilities 13096 16625 3529 TU Total Variable Costs v 59922 73888 13966 TU Fixed Costs Depreciation 4509 14508 24864 24864 Total Flxxed Costs 102360 102350 tal Costs 175897 176248 State the formula for computing the total budgeted costs for the Ironing Department. (Round varlable cost per unit to 2 decimal places, e.g. 1.56. The formula- 1.60 02,360+total variable costs of per direct labor hour

Explanation / Answer

Monthly Manufacturing Overhead Flexibe Budget Rate Activity Level Direct labor hours 44,300 48,700 53,100 57,500 Variable costs 0.41 Indirect labor 18163 19967 21771 23575 0.52 Indirect materials 23036 25324 27612 29900 0.33 Factory utilities 14619 16071 17523 18975 0.25 Factory repairs 11075 12175 13275 14375 1.51 Total variable costs 66893 73537 80181 86825 Fixed costs: Supervision 3681 3681 3681 3681 Depreciation 1568 1568 1568 1568 Insurance 1209 1209 1209 1209 Rent 2072 2072 2072 2072 total fixed costs 8530 8530 8530 8530 total costs 75423 82067 88711 95355 b) Manufacturing Overhead Flexible Budget Budgetat Actual cost Favorable F actual Unfavourable U Activity Level 46,180 46,180 Direct labor hours Variable costs 0.44 Indirect labor 18934 20319 1385 U 0.49 Indirect materials 24014 22628 1385 F 0.36 Factory utilities 15239 16625 1385 U 0.31 Factory repairs 11545 14316 2771 U 1.6 Total variable costs 69732 73888 4156 U Fixed costs: Supervision 3681 3681 0 Depreciation 1568 1568 0 Insurance 1209 1209 0 Rent 2072 2072 0 total fixed costs 8530 8530 0 total costs 78261.8 82418 4156.2 U c) the formula is = $8,530 + $1.51 per direct labor hour

Related Questions

Navigate

• Browse (All)
• Browse Z
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.