Lowell Company’s manufacturing overhead budget for the first quarter of 2014 con

Question

Lowell Company’s manufacturing overhead budget for the first quarter of 2014 contained the following data.

Variable Costs Fixed Costs Indirect materials Indirect labor Utilities Maintenance $11,033 $35,786 6,193 7,739 5,485 Supervisory salaries 10,402 Depreciation 7,717 5,774 Maintenance Property taxes and insurance Actual variable costs were indirect materials $15,410, indirect labor $9,598, utilities $9,073, and maintenance $4,881. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,987. 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.

Explanation / Answer

Ans-

Lowell Company

Fexible budget for 31st March 2014

Item 1.Budget($) 2.Actual($) Variance(1-2)$ Variable Overhead Indirect materials 11033 15410 4377(U) Indirect Labor 10402 9598 804(F) Utilities 7717 9073 1356(U) Maintenence 5774 4881 893(F) Fixed Cost Supervisor salary 35786 35786 N Depreciation 6193 6193 N Property taxes $ insurance 7739 8987 1248(U) Maintenence 5485 5485 N

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