Question

Exercise 23-03 Your answer is partially correct. Try again. 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 $1.00 0.70 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. Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,000 direct labor hours. (List variable costs before fixed costs.) MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2020 T Activity Level Direct Labor Hours 4 Variable Costs Indirect Labor Indirect Materials

Answer 1

MYERS COMPANY
Monthly Manufacturing Overhead Flexible Budget
For the Year 2020
Activity Level
Direct Labor Hours	7000	8000	9000	10000
Variable costs
Indirect Labor	(7000 * $1) =$7000	(8000 * $1) =$8000	(9000 * $1) =$9000	(10000 * $1) =$10000
Indirect Materials	(7000 * $0.7) =$4900	(8000 * $0.7) =$5600	(9000 * $0.7) =$6300	(10000 * $0.7) =$7000
Utilities	(7000 * $0.4) =$2800	(8000 * $0.4) =$3200	(9000 * $0.4) =$3600	(10000 * $0.4) =$4000
Total Variable costs	$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