Exercise 10-4 Variable Costs Fixed Costs MYERS COMPANY Manufacturing Overhead Fl
ID: 2528604 • Letter: E
Question
Exercise 10-4
Variable Costs
Fixed Costs
MYERS COMPANY
Manufacturing Overhead Flexible Budget Report
For the Month Ended July 31, 2017
Difference
Budget
Actual Costs
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
MYERS COMPANY
Manufacturing Overhead Flexible Budget Report
For the Month Ended July 31, 2017
Difference
Budget
Actual Costs
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
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SAVE FOR LATER
SUBMIT ANSWER
Exercise 10-4
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 $1.10 Indirect materials 0.90 Utilities 0.30
Fixed overhead costs per month are Supervision $4,300, Depreciation $1,100, and Property Taxes $800. The company believes it will normally operate in a range of 5,800–10,000 direct labor hours per month.
Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs.
Variable Costs
Fixed Costs
Indirect labor $9,260 Supervision $4,300 Indirect materials 7,590 Depreciation 1,100 Utilities 2,160 Property taxes 800(a) Prepare a flexible budget performance report, assuming that the company worked 8,600 direct labor hours during the month. (List variable costs before fixed costs.)
MYERS COMPANY
Manufacturing Overhead Flexible Budget Report
For the Month Ended July 31, 2017
Difference
Budget
Actual Costs
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$ $ $FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$ $ $FavorableUnfavorableNeither Favorable nor Unfavorable
(b) Prepare a flexible budget performance report, assuming that the company worked 7,900 direct labor hours during the month. (List variable costs before fixed costs.)
MYERS COMPANY
Manufacturing Overhead Flexible Budget Report
For the Month Ended July 31, 2017
Difference
Budget
Actual Costs
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$ $ $UnfavorableFavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
UnfavorableFavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
UnfavorableFavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$ $ $UnfavorableFavorableNeither Favorable nor Unfavorable
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Explanation / Answer
Working:
MYERS COMPANY Manufacturing Overhead Flexible Budget Report Budget Actual Variance Variable overheads: Indirect Labor 9460 9260 200 Favourable Indirect Material 7740 7590 150 Favourable Utilities 2580 2160 420 Favourable Total Variable overheads 19780 19010 770 Favourable Fixed Overheads: Supervision 4300 4300 0 Depreciation 1100 1100 0 Property Taxes 800 800 0 Total Fixed Overheads 6200 6200 0 Total Overheads 25980 25210 770 FavourableRelated Questions
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