Case (3) Data concerning manufacturing overhead for a Saudi Company are presented below. The Mixing...
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Case (3) Data concerning manufacturing overhead for a Saudi Company are presented below. The Mixing Department is a cost center. An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and that 50% of supervisory costs are controllable at the department level. The flexible budget formula and the cost and activity for the months of July and Augustre as follows Flexible Budget Per Actual Costs and Activity Direct Labor Hour July August Direct labor hours 6.000 7,000 Variable Indirect materials SR3.50 SR 20,500 SR 25,100 Indirect labor 6.00 39,500 40,700 Factory supplies 1.00 7,600 8,200 Fixed Depreciation SR20,000 15,000 15,000 Supervision 25,000 23,000 26,000 Property taxes 10,000 12,000 12,000 Total costs SR117,600 SR127,000 26 0 Required (a) Prepare the responsibility reports for the Mixing Department for each month (1 mark). (b) Comment on the manager's performance in controlling costs during the two month period (1 mark)
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