Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2017 contai

Question

Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2017 contained the following data. Variable Costs Fixed Costs Indirect materials $12,000 Supervisory salaries $36,000 Indirect labor 10,000 Depreciation 7,000 Utilities 8,000 Property taxes and insurance 8,000 Maintenance 6,000 Maintenance 5,000 Actual variable costs were indirect materials $13,500, indirect labor $9,500, utilities $8,700, and maintenance $5,000. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,300. The actual activity level equaled the budgeted level. All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

Exercise 24-10 Chubbs Inc.'s manufacturing overhead budget for the first quarter of 2017 contained the following data. Variable Costs Fixed Costs Indirect materials Indirect labor Utilities Maintenance 3,0) 7,000 8,000 5,000 $12,000 Supervisory salaries 10,000 Depreciation 8,000 6,000 Maintenance Property taxes and insurance Actual variable costs were indirect materials $13,500, indirect labor $9,500, utilities $8,700, and maintenance $5,000. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,300. The actual activity level equaled the budgeted level All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

Explanation / Answer

Manufacturing Overhead Flexible Budget :-

Manufacturing Overhead Responsibility Report :-

Particulars Flexi Budget Actual Variance Variable Cost :- Indirect Materials $12000 $13500 $1500 U Indirect Labor $10000 $9500 $500 F Utilities $8000 $8700 $700 U Maintenance $6000 $5000 $1000 F Total Variable Cost $36000 $36700 Fixed Cost :- Supervisory Salaries $36000 $36000 N Depreciation $7000 $7000 N Property taxes and insurance $8000 $8300 $300 U Maintenance $5000 $5000 N Total Fixed Cost (B) $56000 56300 Total Cost (A+B) $92000

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