Question

Exercise 22-3

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		$1.10
Indirect materials		0.70
Utilities		0.40

Fixed overhead costs per month are Supervision $3,600, Depreciation $1,800, and Property Taxes $800. The company believes it will normally operate in a range of 7,700–11,000 direct labor hours per month.

Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,100 direct labor hours. (List variable costs before fixed costs.)

Exercise 22-3 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. $1.10 Indirect labor Indirect materials Utilities 0.70 0.40 Fixed overhead costs per month are Supervision $3,600, Depreciation $1,800, and Property Taxes $800. The company believes it will normally operate in a range of 7,700-11,000 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,100 direct labor hours. (List variable costs before fixed costs.) MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017

Answer 1

11000 MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017 Level of activity Direct Labor hours 7700 8800 9900 Variable cost: Indirect labor 8470 9680 10890 Indirect material 5390 6160 69301 Utilities 3080 3520 3960 Total variable costs 16940 19360 21780 Fixed costs Supervision 3600 36000 36000 Depreciation 1800 1800 1800 Property taxes 800 800 800 Total Fixed costs 6200 6200 6200 Total Manufacturing overhead costs 23140 25560 27980 12100 77001 4400 24200 3600 1800 800 6200 30400