\"Exercise 22-4 Myers Cempany uses aflible budge: for manufacburing overhead bas
ID: 2529659 • Letter: #
Question
"Exercise 22-4 Myers Cempany uses aflible budge: for manufacburing overhead based on direct labor hours. Variable manufacturing overhead costspar direct labor hour ara as fal ows. Indrect lator Indirect materials Utilitias S1.DD 0.5D 0.3D Fixed cverhead“sts per month are Supervision?3,500, Deoreaation s 1,000, and Property Taxes s500. The company believes it will normally operate in range of 5,500-6,5?? direct leber hours per month. Assne that in July 2017, Myers Company incurs the following manufring overhead cos. Variable Costs Fixed Costs Indirect labor Indirect materials Utilities 57,300 Supervision 3,650 Deprmcistion 1,850 Property taxes 3,500 1,000 (a) Prepare a fiexible budget performance repot, assuming that the cempany worked 7,500 direct labor heurs duning the month. (List varable costs before fixed costs.) MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2017 Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs (b) Prepare a flexible budger performance report, assuming that the company worked 7,000 direct labor hours during the manth. (List variable costs before fixed costs.) MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2017 Favorable Unfavorable Nelther Favorable nor Unfavorable Actual CostsExplanation / Answer
Answers
Budget [Flexible]
Actual
Variances
Level of activity
7500 direct labor hours
7500 DLH
Difference
Status
Variable Costs:
Indirect labor
$ 7,500.00
$ 7,300.00
$ 200.00
Favourable
Indirect materials
$ 3,750.00
$ 3,650.00
$ 100.00
Favourable
Utilities
$ 2,250.00
$ 1,850.00
$ 400.00
Favourable
Total Variable Expenses
$ 13,500.00
$ 12,800.00
$ 700.00
Favourable
Fixed Costs:
Supervision
$ 3,500.00
$ 3,500.00
$ -
Neither F nor U
Depreciation
$ 1,000.00
$ 1,000.00
$ -
Neither F nor U
Property Taxes
$ 500.00
$ 500.00
$ -
Neither F nor U
Total Fixed Cost
$ 5,000.00
$ 5,000.00
$ -
Neither F nor U
Total Cost
$ 18,500.00
$ 17,800.00
$ 700.00
Favourable
Budget [Flexible]
Actual
Variances
Level of activity
7000 direct labor hours
7500 DLH
Difference
Status
Variable Costs:
Indirect labor
$ 7,000.00
$ 7,300.00
$ 300.00
Unfavourable
Indirect materials
$ 3,500.00
$ 3,650.00
$ 150.00
Unfavourable
Utilities
$ 2,100.00
$ 1,850.00
$ 250.00
Favourable
Total Variable Expenses
$ 12,600.00
$ 12,800.00
$ 200.00
Unfavourable
Fixed Costs:
Supervision
$ 3,500.00
$ 3,500.00
$ -
Neither F nor U
Depreciation
$ 1,000.00
$ 1,000.00
$ -
Neither F nor U
Property Taxes
$ 500.00
$ 500.00
$ -
Neither F nor U
Total Fixed Cost
$ 5,000.00
$ 5,000.00
$ -
Neither F nor U
Total Cost
$ 17,600.00
$ 17,800.00
$ 200.00
Unfavourable
Budget [Flexible]
Actual
Variances
Level of activity
7500 direct labor hours
7500 DLH
Difference
Status
Variable Costs:
Indirect labor
$ 7,500.00
$ 7,300.00
$ 200.00
Favourable
Indirect materials
$ 3,750.00
$ 3,650.00
$ 100.00
Favourable
Utilities
$ 2,250.00
$ 1,850.00
$ 400.00
Favourable
Total Variable Expenses
$ 13,500.00
$ 12,800.00
$ 700.00
Favourable
Fixed Costs:
Supervision
$ 3,500.00
$ 3,500.00
$ -
Neither F nor U
Depreciation
$ 1,000.00
$ 1,000.00
$ -
Neither F nor U
Property Taxes
$ 500.00
$ 500.00
$ -
Neither F nor U
Total Fixed Cost
$ 5,000.00
$ 5,000.00
$ -
Neither F nor U
Total Cost
$ 18,500.00
$ 17,800.00
$ 700.00
Favourable
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