Question 1 Variable Costs Fixed Costs CHUBBS INC. Manufacturing Overhead Flexibl

Question

Question 1

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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Question 1

Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2017 contained the following data.

Variable Costs

Fixed Costs

Indirect materials $11,200 Supervisory salaries $35,400 Indirect labor 10,600 Depreciation 7,200 Utilities 8,000 Property taxes and insurance 7,200 Maintenance 5,700 Maintenance 4,400
Actual variable costs were indirect materials $15,400, indirect labor $9,600, utilities $9,100, and maintenance $5,400. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,700. 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

Total CostsDepreciationVariable CostsFixed CostsMaintenanceIndirect LaborUtilitiesProperty Taxes and InsuranceIndirect MaterialsSupervisory SalariesTotal Fixed CostsTotal Variable Costs

MaintenanceProperty Taxes and InsuranceTotal Fixed CostsIndirect LaborIndirect MaterialsSupervisory SalariesVariable CostsFixed CostsTotal CostsTotal Variable CostsUtilitiesDepreciation

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

Variable CostsTotal CostsDepreciationUtilitiesProperty Taxes and InsuranceFixed CostsMaintenanceTotal Variable CostsIndirect LaborSupervisory SalariesTotal Fixed CostsIndirect Materials

FavorableUnfavorableNeither Favorable nor Unfavorable

UtilitiesProperty Taxes and InsuranceIndirect MaterialsMaintenanceSupervisory SalariesDepreciationTotal CostsTotal Fixed CostsVariable CostsTotal Variable CostsFixed CostsIndirect Labor

FavorableUnfavorableNeither Favorable nor Unfavorable

MaintenanceProperty Taxes and InsuranceTotal Variable CostsIndirect MaterialsSupervisory SalariesUtilitiesVariable CostsTotal CostsDepreciationTotal Fixed CostsFixed CostsIndirect Labor

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationIndirect MaterialsFixed CostsIndirect LaborMaintenanceProperty Taxes and InsuranceTotal Fixed CostsSupervisory SalariesTotal CostsTotal Variable CostsUtilitiesVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Property Taxes and InsuranceFixed CostsMaintenanceSupervisory SalariesTotal CostsTotal Fixed CostsTotal Variable CostsIndirect LaborIndirect MaterialsUtilitiesVariable CostsDepreciation

Indirect LaborTotal Variable CostsSupervisory SalariesUtilitiesDepreciationTotal Fixed CostsVariable CostsFixed CostsProperty Taxes and InsuranceIndirect MaterialsMaintenanceTotal Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Total Variable CostsProperty Taxes and InsuranceSupervisory SalariesMaintenanceTotal CostsFixed CostsTotal Fixed CostsUtilitiesVariable CostsDepreciationIndirect MaterialsIndirect Labor

FavorableUnfavorableNeither Favorable nor Unfavorable

Fixed CostsUtilitiesTotal Variable CostsIndirect LaborMaintenanceVariable CostsDepreciationIndirect MaterialsSupervisory SalariesTotal CostsProperty Taxes and InsuranceTotal Fixed Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Property Taxes and InsuranceTotal Fixed CostsFixed CostsIndirect LaborIndirect MaterialsVariable CostsMaintenanceDepreciationUtilitiesTotal Variable CostsSupervisory SalariesTotal Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Indirect MaterialsTotal CostsTotal Fixed CostsDepreciationUtilitiesSupervisory SalariesIndirect LaborFixed CostsMaintenanceProperty Taxes and InsuranceTotal Variable CostsVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

Indirect LaborTotal Fixed CostsProperty Taxes and InsuranceTotal CostsUtilitiesSupervisory SalariesVariable CostsTotal Variable CostsDepreciationFixed CostsIndirect MaterialsMaintenance

$

$

$

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

UtilitiesSupervisory SalariesMaintenanceProperty Taxes and InsuranceDepreciationIndirect MaterialsIndirect Labor

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

Indirect LaborMaintenanceSupervisory SalariesUtilitiesProperty Taxes and InsuranceDepreciationIndirect Materials

FavorableUnfavorableNeither Favorable nor Unfavorable

Indirect LaborUtilitiesMaintenanceIndirect MaterialsSupervisory SalariesDepreciationProperty Taxes and Insurance

FavorableUnfavorableNeither Favorable nor Unfavorable

Supervisory SalariesProperty Taxes and InsuranceIndirect MaterialsUtilitiesDepreciationIndirect LaborMaintenance

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationIndirect MaterialsUtilitiesIndirect LaborMaintenanceSupervisory SalariesProperty Taxes and Insurance

FavorableUnfavorableNeither Favorable nor Unfavorable

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

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Explanation / Answer

Budget Actual Differecne variable costs indirect materials 11,200 15,400 4,200 U indirect labor 10,600 9,600 1,000 F utilities 8,000 9,100 1,100 U maintenance 5,700 5,400 300 F total variable costs 35,500 39,500 4,000 U fixed costs Supervisory salaries 35,400 35,400 0 N Depreciation 7,200 7,200 0 N property taxes and insurance 7,200 8,700 1,500 U maintenance 4,400 4,400 0 N total fixed costs 54,200 55,700 1,500 U total costs 89,700 95,200 5,500 U Manufacturing overhead responsibility report Controllable costs Budget Actual Difference indirect materials 11,200 15,400 4,200 U indirect labor 10,600 9,600 1,000 F utilities 8,000 9,100 1,100 U maintenance 10,100 9,800 300 F supervisory salaries 35,400 35,400 0 N total costs 75,300 79,300 4,000 U

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