Problems 349 PROBLEMS ! A Bumblebee Company estimates that 300,000 direct labor

Question

Problems 349 PROBLEMS ! A Bumblebee Company estimates that 300,000 direct labor hours will be win during the coming vear, 2017, in the Packaging Department. On this basis, the iu manufacturing overhead cost data are computed for the year ked Prepare flexible budget manufacturing Fixed Overhead Costs 'overhead 96,000Indirect materials 9.000 Variable Overhead Costsw ySupervision 3como LO 2), AN Depreciation Insurance Rent Property taxes 72,000 30,000 24,000 18,000 20,00 $240,000 $126,000 90,00 69,000 72,000 18,000 $375,000 Repairs Utilities Lubricants 72.000 XLS It is estimated that direct labor hours worked çach.month will range from 2.00010 36000 hours During October, 27,000 direct labor hours were worked and the following over costs were incurred. head Fixed overhead costs: supervision S8,000, depreciation S6,000, insurance S2 400, rent $2,000, and property taxes $1,500. r ariable overhead costs: indirect labor $12,432, indirect materials $7,680, repairs $6,100, utilities $6,840, and lubricants $1,920. VC Ach-uP hr Instructions )Prepare monthl manufacturing overhead flexible budget for each increment of (a) Total costs: DUH 27.000, 3.000 direct labor hours over the relevant range for the year ending December 31. 553,50, DLH 36,00, $65,000 (b) Total $1,182 U 2017 b)Prepare a flexible budget report for October Comment on management's efficiency in controlling manufacturing overhead costs in October

Explanation / Answer

Solution a:

Solution b:

Solution c:

As actual cost of october is higher than standard cost, it means management is not efficient in controlling manufacturing overhead cost in october.

Computation of standard variable overhead per direct labor hour Particulars Budgeted Cost Budgted DLH Overhead Rate Indirect Labor $126,000.00 300000 $0.42 Indirect materials $90,000.00 300000 $0.30 Repairs $69,000.00 300000 $0.23 Utilities $72,000.00 300000 $0.24 Lubricants $18,000.00 300000 $0.06

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