Flexible Budget Application The polishing department of Taylor Manufacturing Com

Question

Flexible Budget Application The polishing department of Taylor Manufacturing Company operated during April 2016 with the following manufacturing overhead cost budget based on 5,000 hours of monthly productive capacity: Taylor Manufacturing Company Polishing Department Overhead Budget (5,000 Hours) For the Month of April 2016 Variable costs: Factory supplies Indirect labor Utilities Patent royalties on secret process $100,000 152,000 68,000 296,000 Total variable overhead $616,000 Fixed costs: Depreciation on factory equipment Factory taxes Factory insurance Utilities (base charge) 160,000 144,000 48,000 32,000 80,000 44 Total fixed overhead 464,000 Total manufacturing overhead $1,080,000

Explanation / Answer

Performanace Report -Manufacturing overhead

For the month ended April 30 2016

Performanace Report -Manufacturing overhead

For the month ended April 30 2016

Actual Budget (4700Hours) variance Variable expense Factory supplies 97570 94000   [100000*4700/5000] 3570 U Indirect labor 136210 142880   [152000*4700/5000] 6670 F Utilities 82800 63920    [68000*4700/5000] 18880 U Patent royalities 280466 278240   [296000*4700/5000] 2226 U Total variable overhead 597046 579040 18006 U Fixed cost supervisory salaries 169000 160000 9000 U Depreciation on equipment 144000 144000 0 NA Factory taxes 57000 48000 9000 U Factory Insurance 32000 32000 0 NA Utilities 96000 80000 16000 U Total fixed overhead 498000 464000 34000 U Total overhead 1095046 1043040 52006 U

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