Problem 22-1A Bumblebee Company estimates that 372,900 direct labor hoursl be wo

Question

Problem 22-1A Bumblebee Company estimates that 372,900 direct labor hoursl be worked during the coming year, 2017, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data are computed for the year. Fixed Overhead Costs Variable Overhead Costs Supervision Depreciation Insurance Rent Property taxes $85,440 Indirect labor 66,240 Indirect materials 33,720 Repairs 29,280 Utilities 12,480 Lubricants $164,076 74,580 74,580 93,225 29,832 $436,293 227,160 It is estimated that direct labor hours worked each month will range from 24,700 to 31,000 hours. During October, 24,700 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: Supervision $7,120, Depreciation $5,520, Insurance $2,785, Rent $2,440, and Property taxes $1,040 Variable overhead costs: Indirect labor $11,888, Indirect materials, $4,570, Repairs $4,870, Utilities $6,475, and Lubricants $2,286 a Prepare a month manufacturing overhead flexible bud et or each increment of 100 direct abor hours over the elevant range or the year endin December L 20 . st varable costs before#xedcosts.

Explanation / Answer

1) activity level Direct labor hours 24,700 26,800 28,900 31,000 variable costs Indirect labor 0.44 10868 11792 12716 13640 indirect materials 0.2 4940 5360 5780 6200 repairs 0.2 4940 5360 5780 6200 utilities 0.25 6175 6700 7225 7750 lubricants 0.08 1976 2144 2312 2480 tota variable cost 1.17 28899 31356 33813 36270 Fixed expenses Supervision 7120 7120 7120 7120 Depreciation 5520 5520 5520 5520 insurance 2810 2810 2810 2810 Rent 2440 2440 2440 2440 property taxes 1040 1040 1040 1040 total fixed expenses 18930 18930 18930 18930 total cost 47829 50286 52743 55200 2) budget Actual difference activity level Direct labor hours 24,700 24,700 variable costs Indirect labor 0.44 10,868 11,888 1,020 U indirect materials 0.2 4940 4,570 370 F repairs 0.2 4940 4,870 70 F utilities 0.25 6175 6,475 300 U lubricants 0.08 1976 2,286 310 U tota variable cost 1.17 28899 30089 1190 U Fixed expenses Supervision 7120 7,120 0 N Depreciation 5520 5,520 0 N insurance 2810 2,785 25 F Rent property taxes 2440 2,440 0 N property taxes 1040 1,040 0 N total fixed expenses 18930 18,905 25 F total cost 47829 48994 1165 U

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