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 $1.30 0.60 0.40 Fixed overhead costs per month are Supervision $3,800, Depreciation $1,000, and Property Taxes $900. 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 2017 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 2017 Direct Labor Hours 10530 9100 10100 Variable Costs Indirect Labor Indirect Materials Utilities Total Variable Costs Fixed Costs Supervision Depreciation

Answer 1

Answer

Monthly Manufacturing Overhead Flexible Budget
For the Year 2017
Activity Level
Direct labor hours	8100	9400	10700	12000
Variable costs:
Indirect Labor	$10,530	$12,220	$13,910	$15,600
Indirect material	$4,860	$5,640	$6,420	$7,200
Utilities	$3,240	$3,760	$4,280	$4,800
Total Variable cost	$18,630	$21,620	$24,610	$27,600
Fixed costs:
Supervision	$3,800	$3,800	$3,800	$3,800
Depreciation	$1,000	$1,000	$1,000	$1,000
Property Taxes	$900	$900	$900	$900
Total Fixed cost	$5,700	$5,700	$5,700	$5,700
Total manufacturing overhead	$24,330	$27,320	$30,310	$33,300