Flexible Budget Application The cutting de overhead cost budget based on 6,000 h

Question

Flexible Budget Application The cutting de overhead cost budget based on 6,000 hours of monthly productive capacity ACC122:DL. 01 and 02-Principles ty Manufacturing Company operated during September 2016 with the following manufacturing Ch 1: Overview of Managerial Accounting Overhead Budget (6,000 Hours) Ch 2: Managerial Accounting Concepts and Cost Flows Indirect labor Ch 3: Cost Accounting Systems: Job Order Patent royalties on secret process Total variable overhead $300,000 Ch 4: Cost Accounting Systems: Process Costing Supervisory salaries Depreciation on factory equipment Factory taxes Factory insurance Utilities (base charge) Ch15: Activity-Based 140,000 Relationships 832,000 C17: Variable Costing: A Tool for Decision Making $632,000 Ch 8: Relevant Costs and Short-Term Decision Making The cutting department was operated for 5,500 hours during September and incurred the following manufacturing overhead costs Factory supplies Ch 9: Planning and Budgeting utilities (base factor) Ch 10: Standard Costing and Variance Analysis 134,000 Patent royalties

Explanation / Answer

Performance report Actual Costs Budget (5500 hours) Variances Variable costs: Factory supplies 40400 44000 3600 F (48000/6000)*5500 Indirect labor 67200 66000 1200 U (72000/6000)*5500 Utilities 38100 33000 5100 U (36000/6000)*5500 Patent royalties 134000 132000 2000 U (144000/6000)*5500 Total variable overhead 279700 275000 4700 U Fixed costs: Supervisory salaries 96000 96000 0 Depreciation on equipment 140000 140000 0 Factory taxes 43400 40000 3400 U Factory insurance 27000 24000 3000 U Utilities 32000 32000 0 Total fixed overhead 338400 332000 6400 U Total overhead costs 618100 607000 11100 U

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