*Will rate/thumbs up for correct answers, Thank you!!* ible manutacturin Bumbleb
ID: 2511791 • Letter: #
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*Will rate/thumbs up for correct answers, Thank you!!*
ible manutacturin Bumblebee Company estimates that 300,000 direct labor hours will be worked during the coming year, 2017, in the Packaging Department. On this basis, the budgeted are computed for the year overhead cost data, shown below Fixed Overhead Costs Variable Overhead Costs Supervision Depreciation Insurance Rent Property taxes 596,000 72,000 30,000 24,000 18,000 $240,000 Indirect labor Indirect materials Repairs Utilities Lubricants S126,000 90,000 69,000 72,000 18,000 S375,000 It is estimated that direct labor hours worked each month will range from 27,000 to 36,000 hours. During October 27,000 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: supervision $8,000, depreciation S6,000, insurance S2,460, rent $2,000, and property taxes $1,500 Variable overhead costs: indirect labor $12,432, indirect materials $7,680, repairs S6,100, utilities S6,840, and lubricants $1,920. (a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,000 direct labor hours over the relevant range for the year ending December 31, 2017 (b) Prepare a flexible budget report for October (c) Comment on management's efficiency in controlling manufacturing overhead costs in October NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a"?".Explanation / Answer
1) activity level Direct labor hours 27,000 30,000 33,000 36,000 variable costs Indirect labor 0.42 11340 12600 13860 15120 indirect materials 0.3 8100 9000 9900 10800 repairs 0.23 6210 6900 7590 8280 utilities 0.24 6480 7200 7920 8640 lubricants 0.06 1620 1800 1980 2160 tota variable cost 1.25 33750 37500 41250 45000 Fixed expenses Supervision 8000 8000 8000 8000 Depreciation 6000 6000 6000 6000 insurance 2500 2500 2500 2500 Rent 2000 2000 2000 2000 property taxes 1500 1500 1500 1500 total fixed expenses 20000 20000 20000 20000 total cost 53750 57500 61250 65000 2) budget Actual difference activity level Direct labor hours 27,000 27,000 variable costs Indirect labor 0.42 11,340 12,432 1,092 U indirect materials 0.3 8100 7,680 420 F repairs 0.23 6210 6,100 110 F utilities 0.24 6480 6,840 360 U lubricants 0.06 1620 1,920 300 U tota variable cost 1.25 33750 34972 1222 U Fixed expenses Supervision 8000 8,000 0 N Depreciation 6000 6,000 0 N insurance 2500 2,460 40 F Rent property taxes 2000 2,000 0 N property taxes 1500 1,500 0 N total fixed expenses 20000 19,960 40 F total cost 53750 54932 1182 U
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