E22-3 Prepare flexible manufacturing overhead budget Myers Company uses a flexib

Question

E22-3 Prepare flexible manufacturing overhead budget 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 $1.00 Indirect materials 0.70 Utilities 0.40 Fixed overhead costs per month are supervision $4,000, depreciation, $1,200, and property taxes $800. The company believes it will normally operate in a range of 7,000 - 10,000 direct labor hours per month. Instructions Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,000 direct labor hours. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017 Activity level      Direct labor hours 7,000 8,000 9,000 10,000 Variable costs      Indirect labor ($1.00) ? ? ? ?      Indirect materials ($0.70) ? ? ? ?      Utilities ($0.40) ? ? ? ?           Total variable cost ($2.10) ? ? ? ? Fixed costs     Supervision Value Value Value Value     Depreciation Value Value Value Value     Property taxes Value Value Value Value          Total fixed costs ? ? ? ? Total costs ? ? ? ? E22-3 Prepare flexible manufacturing overhead budget 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 $1.00 Indirect materials 0.70 Utilities 0.40 Fixed overhead costs per month are supervision $4,000, depreciation, $1,200, and property taxes $800. The company believes it will normally operate in a range of 7,000 - 10,000 direct labor hours per month. Instructions Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,000 direct labor hours. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017 Activity level      Direct labor hours 7,000 8,000 9,000 10,000 Variable costs      Indirect labor ($1.00) ? ? ? ?      Indirect materials ($0.70) ? ? ? ?      Utilities ($0.40) ? ? ? ?           Total variable cost ($2.10) ? ? ? ? Fixed costs     Supervision Value Value Value Value     Depreciation Value Value Value Value     Property taxes Value Value Value Value          Total fixed costs ? ? ? ? Total costs ? ? ? ?

Explanation / Answer

Activity level      Direct labor hours 7000 8000 9000 10000 Variable costs      Indirect labor ($1.00) 7000 8000 9000 10000      Indirect materials ($0.70) 4900 5600 6300 7000      Utilities ($0.40) 2800 3200 3600 4000           Total variable cost ($2.10) 14700 16800 18900 21000 Fixed costs     Supervision 4000 4000 4000 4000     Depreciation 1200 1200 1200 1200     Property taxes 800 800 800 800          Total fixed costs 6000 6000 6000 6000 Total costs 20700 22800 24900 27000

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