Exercise 10-10 Chubbs Inc.\'s manufacturing overhead budget for the first quarte

Question

Exercise 10-10 Chubbs Inc.'s manufacturing overhead budget for the first quartes of 2017 contained the folowing data Variable Costs Flxed Costs Indrect $36,000 7,000 B,000 5,000 $12,000 Supervisory salaries Indirect labor 10,000 Deprediation Property taxes and 8,000 Maritenance 6,000 Mantenance Actual vaniable costs were indiredt materials $13,500, indirect labor $9,5oo, utilities s8,700, and maintenance $5,000. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,300. The actual activity level equaled the budgeted level. All costs are considered controlable 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. (List variable costs before fixed costs. ) Manufacturing Overhead Rlexible Budget Report For the Quarter Ended March 31, 2017 Unfavorable Neither Favorable nor Unfavorable Budget Actual

Explanation / Answer

ans a Manufacturing oVerhead Budget Budget Actual Variance A-B Variable cost Indirect materials $12,000 $13,500 $1,500 Unfavorable Indirect labor 10,000 9500 500 Favorable Utilities 8,000 8700 $700 Unfavorable Maintenance 6,000 5000 1,000 Favorable Total variable cost V $36,000 $36,700 $700 Unfavorable Fixed Costs Supervisory salaries $36,000 $36,000 $0 Neither favorable not unfavorable Depreciation 7,000 7,000 $0 Neither favorable not unfavorable Property taxes and insurance 8,000 8300 $300 Unfavorable Maintenance 5,000 5,000 $0 Neither favorable not unfavorable Total fixed cost F $56,000 $56,300 300 Unfavorable Total cost V+F $92,000 $93,000 $1,000 Unfavorable ans b Controllable cost Budget Actual Variable cost Indirect materials $12,000 $13,500 $1,500 Unfavorable Indirect labor $10,000 $9,500 $500 Favorable Utilities $8,000 $8,700 $700 Unfavorable Maintenance $6,000 $5,000 $1,000 Favorable Total variable cost V $36,000 $36,700 $700 Unfavorable If any doubt please comment

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