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1. Ayayai Company uses a flexible budget for manufacturing overhead based on direct labor hours. Budgeted variable manufacturing overhead costs per direct labor hour are as follows.

Indirect labor		$1.00
Indirect materials		0.70
Utilities		0.40

Budgeted fixed overhead costs per month are Supervision $4,960, Depreciation $1,488, and property Taxes $992. The company believes it will normally operate in a range of 8,68012,400 direct labor hours per month. Assume that in July 2022, Ayayai Company incurs the following manufacturing overhead costs.

Variable Costs				Fixed Costs
Indirect labor		$10,912		Supervision		$4,960
Indirect materials		7,192		Depreciation		1,488
Utilities		3,968		Property taxes		992

(a) Prepare a flexible budget performance report, assuming that the company worked 11,160 direct labor hours during the month. (List variable costs before fixed costs.)

2. Ayayai Companys organization chart includes the president; the vice president of production; three assembly factoriesDallas, Atlanta, and Tucson; and two departments within each factoryMachining and Finishing. Budget and actual manufacturing cost data for July 2022 are as follows. Finishing DepartmentDallas: direct materials $52,700 actual, $54,560 budget; direct labor $103,416 actual, $101,680 budget; manufacturing overhead $63,240 actual, $61,008 budget. Machining DepartmentDallas: total manufacturing costs $272,800 actual, $271,560 budget. Atlanta factory: total manufacturing costs $525,760 actual, $520,800 budget. Tucson factory: total manufacturing costs $612,808 actual, $615,660 budget. The Dallas factory managers office costs were $117,800 actual and $114,080 budget. The vice president of productions office costs were $163,680 actual and $161,200 budget. Office costs are not allocated to departments and factories. (a) Prepare the reports in a responsibility system for: The Finishing DepartmentDallas

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