Problem 22-1A Fixed Overhead Costs Variable Overhead Costs $86,040 $148,302 76,0

Question

Problem 22-1A

Fixed Overhead Costs

Variable Overhead Costs

$86,040

$148,302

76,080

95,337

29,880

45,903

28,800

84,744

19,920

31,779

$240,720

$406,065

COOK COMPANY
Packaging Department
Monthly Manufacturing Overhead Flexible Budget
For the Year 2014

LINK TO TEXT

LINK TO VIDEO

COOK COMPANY
Packaging Department
Manufacturing Overhead Flexible Budget Report
For the Month Ended October 31, 2014

Difference

Budget

Actual Costs

Favorable (F)
Unfavorable (U)
Neither Favorable
nor Unfavorable (N)

Problem 22-1A

Cook Company estimates that 353,100 direct labor hours will be worked during the coming year, 2014, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data, are computed for the year.

Fixed Overhead Costs

Variable Overhead Costs

Supervision

$86,040

Indirect labor

$148,302

Depreciation

76,080

Indirect materials

95,337

Insurance

29,880

Repairs

45,903

Rent

28,800

Utilities

84,744

Property taxes

19,920

Lubricants

31,779

$240,720

$406,065

It is estimated that direct labor hours worked each month will range from 21,500 to 31,100 hours.

During October, 21,500 direct labor hours were worked and the following overhead costs were incurred.

Fixed overhead costs: supervision $7,170, depreciation $6,340, insurance $2,464, rent $2,400, and property taxes $1,660.

Variable overhead costs: indirect labor $10,032, indirect materials, $5,378, repairs $2,753, utilities $5,478, and lubricants $2,183.

Explanation / Answer

COOK COMPANY
Packaging Department
Monthly Manufacturing Overhead Flexible Budget
For the Year 2014

Working Notes for the above answer

1

2

2

COOK COMPANY
Packaging Department
Manufacturing Overhead Flexible Budget Report
For the Month Ended October 31, 2014

Particiular Activity level Direct labor hours 21500 24700 27900 31100 Variable costs direct labor ($.42)* 9030 10374 11718 13062 Indirect materials ($.27) 5805 6669 7533 8397 Repairs ($0.13) 2795 3211 3627 4043 Utilities ($0.24) 5160 5928 6696 7464 Lubricants ($0.09) 1935 2223 2511 2799 Total variable costs ($1.15) 24725 28405 32085 35765 Fixed costs Supervision 7170 7170 7170 7170 Depreciation 6340 6340 6340 6340 Insurance 2464 2464 2464 2464 Rent 2400 2400 2400 2400 Property taxes 1660 1660 1660 1660 Total fixed costs 20034 20034 20034 20034 Total costs 44759 48439 52119 55799

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

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