Question

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 Indirect materials Utilities $1.20 0.70 0.20 Fixed overhead costs per month are Supervision $4,300, Depreciation $2,000, and Property Taxes $700. The company believes it will normally operate in a range of 8,100-12,000 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,300 direct labor hours. (List variable costs before fixed costs.) MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2020

Answer 1

MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2020 Level of activity Direct Labor hours 8100 9400 10700 12000 Variable cost: Indirect labor 9720 11280 12840 14400 Indirect material 56700 6580 7490 8400 Utilities 1620 1880 2140 24001 Total variable costs 17010 19740 22470 25200 Fixed costs Supervision 4300 43001 4300 4300 Depreciation 2000 2000 2000 2000 Property taxes 700 700 700 700 Total Fixed costs 7000 7000 7000 7000 Total Manufacturing overhead costs 24010 26740 2947032200 Working notes for Variable cost: Indirect labor cost per unit * Direct labor hours per month Indirect material cost per unit * Direct labor hours per month Utilities cost per unit * Direct labor hours per month