NE Exercise 10-3 Myers Company uses a flexible budget for manufacturing overhead

Question

NE Exercise 10-3 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 Indirect materials Utilities $1.30 0.80 0.30 Fixed overhead costs per month are Supervision $4,400, Depreciation $1,200, and Property Taxes $600. The company believes it will normally operate in a range of 7,200-10,200 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,000 direct labor hours. (List variable costs before fixed costs.) MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017 LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: S?MILAR EXERC?SI

Explanation / Answer

Monthly manufacturing overhead budget :

Labour hour 7200 8200 9200 10200 Variable cost Indirect labour 9360 10660 11960 13260 Indirect material 5760 6560 7360 8160 Utilities 2160 2460 2760 3060 Total variable cost 17280 19680 22080 24480 Fixed cost Supervision 4400 4400 4400 4400 Depreciation 1200 1200 1200 1200 Property tax 600 600 600 600 Total fixed cost 6200 6200 6200 6200 Total Cost 23480 25880 28280 30680

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