Exercise 22-10 Variable Costs Fixed Costs CHUBBS INC. Manufacturing Overhead Fle
ID: 2571581 • Letter: E
Question
Exercise 22-10
Variable Costs
Fixed Costs
CHUBBS INC.
Manufacturing Overhead Flexible Budget Report
For the Quarter Ended March 31, 2017
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
CHUBBS INC.
Manufacturing Overhead Responsibility Report
For the Quarter Ended March 31, 2017
Difference
Controllable Costs
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
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Exercise 22-10
Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2017 contained the following data.Variable Costs
Fixed Costs
Indirect materials $12,000 Supervisory salaries $36,700 Indirect labor 10,900 Depreciation 6,700 Utilities 7,700 Property taxes and insurance 7,800 Maintenance 6,000 Maintenance 4,400Actual variable costs were indirect materials $14,900, indirect labor $9,500, utilities $9,500, and maintenance $5,400. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,600. The actual activity level equaled the budgeted level.
All costs are considered controllable 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.)
CHUBBS INC.
Manufacturing Overhead Flexible Budget Report
For the Quarter Ended March 31, 2017
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Fixed CostsVariable CostsIndirect LaborTotal Variable CostsTotal Fixed CostsIndirect MaterialsMaintenanceDepreciationUtilitiesProperty Taxes and InsuranceSupervisory SalariesTotal Costs
Property Taxes and InsuranceSupervisory SalariesTotal Variable CostsTotal CostsVariable CostsMaintenanceTotal Fixed CostsDepreciationFixed CostsUtilitiesIndirect LaborIndirect Materials
$ $ $FavorableUnfavorableNeither Favorable nor Unfavorable
Property Taxes and InsuranceFixed CostsVariable CostsTotal CostsIndirect LaborTotal Fixed CostsDepreciationIndirect MaterialsSupervisory SalariesMaintenanceTotal Variable CostsUtilities
FavorableUnfavorableNeither Favorable nor Unfavorable
Indirect LaborIndirect MaterialsTotal CostsMaintenanceProperty Taxes and InsuranceUtilitiesVariable CostsTotal Fixed CostsDepreciationTotal Variable CostsFixed CostsSupervisory Salaries
FavorableUnfavorableNeither Favorable nor Unfavorable
Indirect LaborVariable CostsFixed CostsTotal CostsIndirect MaterialsMaintenanceTotal Variable CostsProperty Taxes and InsuranceDepreciationSupervisory SalariesTotal Fixed CostsUtilities
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationVariable CostsFixed CostsUtilitiesIndirect LaborIndirect MaterialsMaintenanceProperty Taxes and InsuranceSupervisory SalariesTotal CostsTotal Fixed CostsTotal Variable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
Total Variable CostsMaintenanceUtilitiesVariable CostsDepreciationIndirect MaterialsFixed CostsProperty Taxes and InsuranceSupervisory SalariesIndirect LaborTotal CostsTotal Fixed Costs
Supervisory SalariesDepreciationProperty Taxes and InsuranceMaintenanceTotal Fixed CostsTotal CostsTotal Variable CostsIndirect LaborUtilitiesVariable CostsFixed CostsIndirect Materials
FavorableUnfavorableNeither Favorable nor Unfavorable
Variable CostsTotal Fixed CostsSupervisory SalariesProperty Taxes and InsuranceFixed CostsTotal CostsDepreciationTotal Variable CostsIndirect LaborUtilitiesIndirect MaterialsMaintenance
FavorableUnfavorableNeither Favorable nor Unfavorable
Indirect LaborFixed CostsTotal CostsIndirect MaterialsProperty Taxes and InsuranceUtilitiesTotal Fixed CostsDepreciationSupervisory SalariesMaintenanceTotal Variable CostsVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
Supervisory SalariesUtilitiesVariable CostsTotal Variable CostsIndirect LaborFixed CostsTotal CostsDepreciationTotal Fixed CostsIndirect MaterialsMaintenanceProperty Taxes and Insurance
FavorableUnfavorableNeither Favorable nor Unfavorable
Total CostsVariable CostsMaintenanceSupervisory SalariesFixed CostsUtilitiesTotal Fixed CostsDepreciationIndirect LaborTotal Variable CostsIndirect MaterialsProperty Taxes and Insurance
FavorableUnfavorableNeither Favorable nor Unfavorable
UtilitiesTotal Variable CostsFixed CostsSupervisory SalariesTotal CostsIndirect LaborMaintenanceIndirect MaterialsVariable CostsDepreciationProperty Taxes and InsuranceTotal Fixed Costs
$ $ $FavorableUnfavorableNeither Favorable nor Unfavorable
(b) Prepare a responsibility report for the first quarter.
CHUBBS INC.
Manufacturing Overhead Responsibility Report
For the Quarter Ended March 31, 2017
Difference
Controllable Costs
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
DepreciationIndirect MaterialsMaintenanceUtilitiesIndirect LaborProperty Taxes and InsuranceSupervisory Salaries
$ $ $FavorableUnfavorableNeither Favorable nor Unfavorable
UtilitiesMaintenanceDepreciationIndirect MaterialsIndirect LaborSupervisory SalariesProperty Taxes and Insurance
FavorableUnfavorableNeither Favorable nor Unfavorable
Indirect LaborMaintenanceUtilitiesProperty Taxes and InsuranceDepreciationIndirect MaterialsSupervisory Salaries
FavorableUnfavorableNeither Favorable nor Unfavorable
Supervisory SalariesDepreciationIndirect MaterialsProperty Taxes and InsuranceUtilitiesIndirect LaborMaintenance
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationIndirect MaterialsIndirect LaborSupervisory SalariesMaintenanceUtilitiesProperty Taxes and Insurance
FavorableUnfavorableNeither Favorable nor Unfavorable
$ $ $FavorableUnfavorableNeither Favorable nor Unfavorable
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Explanation / Answer
Manufacturing overhead Flexible Budget Report Budget Actual Fav/unfav Variable costs Indirect materials 12,000 14,900 2,900 U indirect labor 10,900 9,500 1,400 F Utilities 7,700 9,500 1,800 U Maintenance 6,000 5,400 600 F total variable costs 36,600 39,300 2,700 U fixed costs supervisory salaries 36,700 36,700 0 N Depreciation 6,700 6,700 0 N Property taxes and insurance 7,800 8,600 800 U Maintenance 4,400 4,400 0 N total fixed cost 55,600 56,400 800 N total expense 92,200 95,700 3,500 U 2) Controllable costs Budget Actual Fav/unfav Indirect materials 12,000 14,900 2,900 U indirect labor 10,900 9,500 1,400 F Utilities 7,700 9,500 1,800 U Maintenance 10,400 9,800 600 F Depreciation 6,700 6,700 0 N total 47,700 50,400 2,700 U
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