Question

Question 10 Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours Rate per Direct Variable costs Labor Hour Annual Fixed Costs $46,800 Indirect labor $0.42 Supervision Indirect materials Depreciation 16,920 0.55 Factory utilities 0.32 Insurance 14,760 Factory repairs 28,080 0.20 Rent The master overhead budget was prepared on the expectation that 479,200 direct labor hours will be worked during the year. In June, 46,1000 direct labor hours were worked. At that level of activity, actual costs were as shown below Variable-per direct labor hour: indirect labor $0.44, indirect materials $0.54, factory utilities $0.35, and factory repairs $0.24. Fixed: same as budgeted

Answer 1

Monthly Manufacturing Overhead Flexible Budget
For the Year 2020
Activity level
Direct labor hours	35000	40800	46600	52400
Variable costs
Indirect labor	14700	17136	19572	22008
Indirect materials	19250	22440	25630	28820
Factory Utilities	11200	13056	14912	16768
Factory Repairs	7000	8160	9320	10480
Total variable costs	52150	60792	69434	78076
Fixed costs
Supervision	3900	3900	3900	3900
Depreciation	1410	1410	1410	1410
Insurance	1230	1230	1230	1230
Rent	2340	2340	2340	2340
Total fixed costs	8880	8880	8880	8880
Total costs	61030	69672	78314	86956

b
Monthly Manufacturing Flexible Budget Report
For the Month ended June 30, 2020
	Budget	Actual costs	Difference
Direct labor hours	46100	46100
Variable costs
Indirect labor	19362	20284	922	Unfavorable
Indirect materials	25355	24894	461	Favorable
Factory Utilities	14752	16135	1383	Unfavorable
Factory Repairs	9220	11064	1844	Unfavorable
Total variable costs	68689	72377	3688	Unfavorable
Fixed costs
Supervision	3900	3900	0	Neither Favorable nor Unfavorable
Depreciation	1410	1410	0	Neither Favorable nor Unfavorable
Insurance	1230	1230	0	Neither Favorable nor Unfavorable
Rent	2340	2340	0	Neither Favorable nor Unfavorable
Total fixed costs	8880	8880	0	Neither Favorable nor Unfavorable
Total costs	77569	81257	3688	Unfavorable

Answer 2

Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2010.The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable Costs: Indirect labor (????); Indirect materials (????); Factory utilities (???); Factory repairs (????) NOTE: fill the expectation variable cost per unit range between (0.10 cent TO 1 $). Annual Fixed Costs: Supervision $42,000; Depreciation 18,000; Insurance 12,000; Rent 24,000. The master overhead budget was prepared on the expectation that 480,000 direct labor hours will be worked during the year. In June, 42,000 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable—per direct labor hour: Indirect labor (????), Indirect materials (????), Factory utilities (???), and Factory repairs (????). NOTE: fill the actual costs variable cost per unit range between (0.10 TO 0.60 cent $) then start to answer the report. Instructions (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2010, assuming production levels range from 50,000 to 70,000 direct labor hours. Use increments of 5,000 direct labor hours. (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget.