Myers Company uses a flexible budget for manufacturing overhead based on direct

Question

Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.

Indirect labor $1.20

Indirect materials 0.60

Utilities 0.40

Fixed overhead costs per month are Supervision $4,000,

Depreciation $1,600

, and Property Taxes $800.

The company believes it will normally operate in a range of 6,200–11,600 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,800 direct labor hours. (List variable costs before fixed costs.)

Exercise 22-3 Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor Indirect materials Utilities $1.20 0.60 0.40 Fixed overhead costs per month are Supervision $4,000 Depreciation $1 600 and Property Taxes S3 The company believes wil normally opera en a range of . 0 11,600 direct labor hours per month Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,800 direct labor hours. (List variable costs before fixed costs)

Explanation / Answer

Activity level Direct labor hours 6200 8000 9800 11600 Variable costs: Indirect labor 7440 9600 11760 13920 Indirect materials 3720 4800 5880 6960 Utilities 2480 3200 3920 4640 Total variable cost 13640 17600 21560 25520 Fixed costs: Supervision 4000 4000 4000 4000 Depreciation 1600 1600 1600 1600 Property taxes 800 800 800 800 Total fixed costs 6400 6400 6400 6400 Total costs 20040 24000 27960 31920

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

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