Fixed Variable cost Supervision: $87,000 Depreciation: $72,840 Insurance: $25,08

Question

Fixed Variable cost Supervision: $87,000 Depreciation: $72,840 Insurance: $25,080 Rent: 18,480 Property Taxes: 19,200 Total: $222,600
Variable Overhead Cost: Indirect labor: $173,520 Indirect materials: $93,990 Repairs: $61,455 Utilities: $57,840 Lubricants: $32,535 Total Variable Cost: $419,340
It is estimated that direct labor hours worked each month range from 26,300 to 34,100 hours. During October, 26,300 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: supervision: 7,250, depreciation: 6,070, insurance: $2,065, rent: $1,540, and property taxes: $1,600. Variable overhead costs: indirect labor $14,639, indirect materials: $6,523, repairs: $4,423, utilities: $4,530, and lubricants: $2,742.
PREPARE A FLEXIBLE BUDGET REPORT FOR OCTOBER. ni wiley COOK COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended October 31, 2014 NeitherF Direct Labor Hours 26,300 26,300 Vanable Costs ndrect Labor Indirect Materials Repairs Utiites Total Variable Costs ed Costs Rights Reserved. A Disah of

Explanation / Answer

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Notes:

1) Calculation of Variable Overhead Costs for Flexible Budget:

Indirect Labor = 173,520/361,500*26,300 = $12,624

Indirect Materials = 93,990/361,500*26,300 = $6,838

Repairs = 61,455/361,500*26,300 = $4,471

Utilities = 57,840/361,500*26,300 = $4,208

Lubricants = 32,535/361,500*26,300 = $2,367

__________o

2) Fixed overhead costs for flexible budget have been calculated per month as follows:

Supervision = 87,000/12 = $7,250

Depreciation = 72,840/12 = $6,070

Insurance = 25,080/12 = $2,090

Rent = 18,480/12 = $1,540

Property Taxes = 19,200/12 = $1,600

Cook Company Packaging Department Manufacturing Overhead Flexible Budget Report For the Month Ended October 31st 2014 Budget Actual Costs Difference (F/U/N) Direct Labor Hours 26,300 26,300 Variable Costs Indirect Labor 12,624 14,639 2,015 U Indirect Materials 6,838 6,523 315 F Repairs 4,471 4,423 48 F Utilities 4,208 4,530 322 U Lubricants 2,367 2,742 375 U Total Variable Cost (A) $30,508 $32,857 $2,349 U Fixed Costs Supervision 7,250 7,250 0 N Depreciation 6,070 6,070 0 N Insurance 2,090 2,065 -25 F Rent 1,540 1,540 0 N Property Taxes 1,600 1,600 0 N Total Fixed Costs $18,550 $18,525 -$25 F Total Costs $49,058 $51,382 $2,324 U

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