Chamberlin Company estimates that 347,800 direct labor hours will be worked duri
ID: 2376067 • Letter: C
Question
Chamberlin Company estimates that 347,800 direct labor hours will be worked during the coming year, 2012, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.
It is estimated that direct labor hours worked each month will range from 22,600 to 33,400 hours.
During October, 22,600 direct labor hours were worked and the following overhead costs were incurred.
Fixed overhead costs: Supervision $7,760, Depreciation $4,750, Insurance $2,561, Rent $2,080, and Property taxes $1,200.
Variable overhead costs: Indirect labor $7,870, Indirect materials, $5,288, Repairs $4,444, Utilities $5,080, and Lubricants $2,066.
Prepare a flexible budget report for October.
Fixed Overhead Costs Variable Overhead Costs Supervision $93,120 Indirect labor $107,818 Depreciation 57,000 Indirect materials 86,950 Insurance 31,200 Repairs 69,560 Rent 24,960 Utilities 73,038 Property taxes 14,400 Lubricants 27,824 $220,680 $365,190Explanation / Answer
budget actual variance
DLH 22600 22600
variable cost
indirect labour 7006 7870 864 (U)
indrct material 5650 5288 362(f)
repairs 4522 4444 78(f)
utilities 4746 5080 334 (U)
Lubricants 1808 2066 258 (U)
FIXED
Supervision 7,760 7,760 0
Depreciationb 4750 4750 0
insurance 2600 2561 0
rent 2080 2080 0
property tax 1200 1200 0
total cost 42122 43099 977(U)
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