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		0.20

Fixed overhead costs per month are Supervision $4,000, Depreciation $1,000, and Property Taxes $500. The company believes it will normally operate in a range of 7,000–10,600 direct labor hours per month.

Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,200 direct labor hours. (List variable costs before fixed costs.)

MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017
select an opening budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
select a Budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		Enter a number of hours		Enter a number of hours		Enter a number of hours		Enter a number of hours
select an opening name for section one                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
select a Budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select a Budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a Budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a closing name for section one                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		enter a total amount for section one		enter a total amount for section one		enter a total amount for section one		enter a total amount for section one
select an opening name for section two                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
select a Budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a Budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a Budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a closing name for section two                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		enter a total amount for section two		enter a total amount for section two		enter a total amount for section two		enter a total amount for section two
select a closing Budget item                                                          Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		$enter a total amount for the Manufacturing Overhead Flexible Budget		$enter a total amount for the Manufacturing Overhead Flexible Budget		$enter a total amount for the Manufacturing Overhead Flexible Budget		$enter a total amount for the Manufacturing Overhead Flexible Budget

Answer 1

Flexible budget

Activity level
Direct labor hours	7000	8200	9400	10600
Variable manufacturing overhead
Indirect labor	7000	8200	9400	10600
Indirect material	4900	5740	6580	7420
Utilities	1400	1640	1880	2120
Total variable manufacturing overhead	13300	15580	17860	20140
Fixed manufacturing overhead
Supervision	4000	4000	4000	4000
Depreciation	1000	1000	1000	1000
Property taxes	500	500	500	500
Total fixed manufacturing overhead	5500	5500	5500	5500
Total manufacturing overhead	18800	21080	23360	25640