HARTSELL MANUFACTURING Corporation is continuing its budget preparations. HARTSE
ID: 2468134 • Letter: H
Question
HARTSELL MANUFACTURING Corporation is continuing its budget preparations. HARTSELL MANUFACTURING had the following static budget and overhead costs for March 2014.
HARTSELL MANUFACTURING CORPORATION HARTSELL MANUFACTURING CORPORATION
Manufacturing Overhead Budget Manufacturing Overhead Costs (Actual)
(Static) For the Month of March 2014 For the Month of March 2014
Budgeted production in units
117,500
Production in units
118,500
Budgeted costs
Costs
Indirect materials
$ 5,875
Indirect materials
$ 5,910
Indirect labor
14,100
Indirect labor
14,195
Utilities
11,750
Utilities
11,880
Maintenance
8,225
Maintenance
8,275
Salaries
42,000
Salaries
42,000
Depreciation
16,800
Depreciation
16,800
Property taxes
3,000
Property taxes
3,000
Insurance
1,200
Insurance
1,200
Janitorial
1,500
Janitorial
1,500
Total budgeted costs
$104,450
Total costs
$104,760
HARTSELL MANUFACTURING produced 118,500 units in March rather than the budgeted number of units.
Instructions
(a) Prepare a flexible overhead budget based on the following amounts produced.
(1) 115,500 units
(2) 116,500 units
(3) 117,500 units
(b) Prepare a flexible budget report showing the differences (favorable and unfavorable) in manufacturing overhead costs for the month of March.
Budgeted production in units
117,500
Production in units
118,500
Budgeted costs
Costs
Indirect materials
$ 5,875
Indirect materials
$ 5,910
Indirect labor
14,100
Indirect labor
14,195
Utilities
11,750
Utilities
11,880
Maintenance
8,225
Maintenance
8,275
Salaries
42,000
Salaries
42,000
Depreciation
16,800
Depreciation
16,800
Property taxes
3,000
Property taxes
3,000
Insurance
1,200
Insurance
1,200
Janitorial
1,500
Janitorial
1,500
Total budgeted costs
$104,450
Total costs
$104,760
Explanation / Answer
111,500
116,500
117,500
Costs
Indirect materials
5,575
5,825
5,875
Indirect labor
13,380
13,980
14,100
Utilities
11,150
11,650
11,750
Maintenance
7,850
8,155
8,225
Salaries
42,000
42,000
42,000
Depreciation
16,800
16,800
16,800
Property taxes
3,000
3,000
3,000
Insurance
1,200
1,200
1,200
Janitorial
1,500
1,500
1,500
Total cost
102,455
104,110
104,450
Actual
Flexible
Variance
Indirect materials
5,910
5,925
15(F)
Indirect labor
14,195
14,220
25(F)
Utilities
11,880
11,850
30(U)
Maintenance
8,275
8,295
20(F)
Salaries
42,000
42,000
00
Depreciation
16,800
16,800
0
Property taxes
3,000
3,000
0
Insurance
1,200
1,200
0
Janitorial
1,500
1,500
0
Total cost
104,760
104,790
30(U)
111,500
116,500
117,500
Costs
Indirect materials
5,575
5,825
5,875
Indirect labor
13,380
13,980
14,100
Utilities
11,150
11,650
11,750
Maintenance
7,850
8,155
8,225
Salaries
42,000
42,000
42,000
Depreciation
16,800
16,800
16,800
Property taxes
3,000
3,000
3,000
Insurance
1,200
1,200
1,200
Janitorial
1,500
1,500
1,500
Total cost
102,455
104,110
104,450
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