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 $1.00 Indirect materials 0.70 Utilities 0.40 Fixed overhead costs per month are Supervision $4,200, Depreciation $1,800, and Property Taxes $600. The company believes it will normally operate in a range of 7,000–13,000 direct labor hours per month. Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor $10,760 Supervision $4,200 Indirect materials 7,520 Depreciation 1,800 Utilities 3,950 Property taxes 600 (a) Prepare a flexible budget performance report, assuming that the company worked 11,000 direct labor hours during the month. (List variable costs before fixed costs.)

Answer 1

Answer-

MYERS COMPANY
Manufacturing Overhead Flexible Budget Report
For the month ended July 31,2017
Particulars	Flexible Budget	Actual Costs	Variances	Remark
11000 Direct Labor Hours	$	$	$
Variable costs:-
Indirect labor	11000 hours*$1.00 per hour=11000	10760	240	Favorable
Indirect materials	11000 hours*$0.70 per hour=7700	7520	180	Favorable
Utilities	11000 hours*$0.40 per hour=4400	3950	450	Favorable
Total variable costs (a)	23100	22230	870	Favorable
Fixed costs:-
Supervision	4200	4200	0	None
Depreciation	1800	1800	0	None
Property Tax	600	600	0	None
Total fixed costs (b)	6600	6600	0	None
Total cost (c=a+b)	29700	28830	870	Favorable