Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable...
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Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.
Indirect labor
$ 1.20
Indirect materials
0.80
Utilities
0.40
Fixed overhead costs per month are Supervision $ 3,600 , Depreciation $ 1,000 , and Property Taxes $ 900 . The company believes it will normally operate in a range of 8,000 13,700 direct labor hours per month. Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs.
Variable Costs
Fixed Costs
Indirect labor
$ 13,920
Supervision
$ 3,600
Indirect materials
9,320
Depreciation
1,000
Utilities
4,240
Property taxes
900
(a) Prepare a flexible budget performance report, assuming that the company worked 11,800 direct labor hours during the month. (List variable costs before fixed costs.)
(b) Prepare a flexible budget performance report, assuming that the company worked 11,200 direct labor hours during the month.
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