Exercise 22-10 Chubbs Inc\'s manufacturing overhead budget for the first quarter

Question

Exercise 22-10 Chubbs Inc's manufacturing overhead budget for the first quarter of 2017 contained the following data. Varlable Costs Fixed Costs $11,200 Supervisory salaries 35,600 7,000 7,100 5,500 indirect labor 59,6 materials 10,600 Depreciation 7,000 insurance 5,700 Maintenance ndirect labar Property taxes and Utiities 4.500, 00, utl $9,400, and ce $5,200 budgeted level. All costs are considered contrellable by the production department manager except for depreciation, and property taxes and insurance.

Explanation / Answer

a) Manufacturing overhead Flexible budget Report Budget Actual Difference Variable costs Indirect materials 11,200 14,500 3,300 U indirect labor 10,600 9,600 1,000 F Utilities 7,000 9,400 2,400 U Maintenance 5,700 5,200 500 F total variable costs 34,500 38,700 4,200 U Fixed expense Supervisory salaries 35,600 35,600 0 N Depreciation 7,000 7,000 0 N property taxes & insurance 7,100 8,200 1,100 U Maintenance 5,500 5,500 0 N total fixed expense 55,200 56,300 1,100 U total costs 89,700 95,000 5,300 U B) Manufacturing overhead responsibility report budget actual Difference controllable costs Indirect materials 11,200 14,500 3,300 U indirect labor 10,600 9,600 1,000 F Utilities 7,000 9,400 2,400 U Maintenance 11,200 10,700 500 F Supervisory salaries 35,600 35,600 0 N 75,600 79,800 4,200 U

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