Exercise 22-3 Myers Company uses a flexible budget for manufacturing overhead ba

Question

Exercise 22-3 Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manudacturing overhead costs per drect labeor hour are as follows. Indirect labor Indirect materials Utilities $1.00 0.50 0.30 Fixed overhead costs per month are Supervision $4,100, Deprecdation $1,000, and Property Taxes $500. The company month believes it will normally operate in a range of 5,800-10,600 direct labor hours pe flexible budget for 2017 for the expected r costs before fixed costs.) MYERS For the Year 2017 Question Attempts: 0 of 5 used

Explanation / Answer

Prepare Flexible Budget :

Activity Direct labour hours 5800 7400 9000 10600 Variable manufacturing overhead cost Indirect Labour 5800 7400 9000 10600 Indirect material 2900 3700 4500 5300 Utilities 1740 2220 2700 3180 Total variable manufacturing overhead 10440 13320 16200 19080 Fixed manufacturing overhead Supervision 4100 4100 4100 4100 Depreciation 1000 1000 1000 1000 Property tax 500 500 500 500 Total Fixed manufacturing overhead 5600 5600 5600 5600 Total manufacturing overhead 16040 18920 21800 24680

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