Question

upe WZ Company estimates that 240,000 direct labor hours will be worked during 2018 in the Painting Department. Based on this estimate, the following budget was developed for manufacturing overhead costs. Variable Overhead Costs Indirect labor $72,000 Indirect materials 48,000 Repairs 36,000 Utilities 26,400 Lubricants 9,600 $192,000 Fixed Overhead Costs Supervision $75,000 Depreciation 30,000 Insurance 12,000 Rent 9,000 Property taxes 6,000 $132,000 It is estimated that direct labor hours worked each month will range from 16,000 to 24,000 hours. During January, 20,000 direct labor hours were worked and the following overhead costs were incurred. Variable Overhead Costs Indirect labor $6,300 Indirect materials 3,800 Repairs 2,700 Utilities 1,900 Lubricants 830 $15,530 Fixed Overhead Costs Supervision $6,250 Depreciation 2,500 Insurance 1,000 Rent 750 Property taxes 500 $11,000 Instructions for Project 2: 1. Using Excel, prepare a monthly flexible manufacturing overhead budget for each increment of 2,000 direct labor hours over the relevant range for the year ending December 31, 2020. Refer to Illustration 23.13 on page 23-10 for an example. 2. Using Excel, prepare a manufacturing overhead budget report for January in good form. Refer to Illustration 23.10 on page 23-8 as a guide.

Answer 1

Dato Page No. statement showing fleable manufacturing Overhead Budget 240000 pact.labour Hous 16000 18000 20000 22000 24000 vallal Overhead Per Hour Cost irekt Material T Todirect labour Indirect Material Repairs utilities Lubricants G2000 48000 | 36000 | 26400 1 9600 10.30 4800 5400 6000 66007200 10.20 13200 13600 4000 4400 4800 0.15 2400 2700 3000 3300 3600 bill 1 1760 1980 2200 2420 2640 0.04 640 720 800 880 960 Total Vorable Overhead losts | 192000 | 12800 14400 16000 1760019200 Add: fixed over head lost vision 75000 Depreciation 30000 Insurance 12000 Rent 9000 Property Taxes boob - Total fixed Overhead 132000 75000 75000 75000 75000 75000! 30000 30000 30000 30000 30000 12000 12000 12000 12000/2000 gooo gooo 9000 9ooo gooo 6ooo 60oom | 6000 6000 6000 132000 132000 32000 1132000 32000 Costs - Total Manufacturing Overhead lost 944800 14640014800014960)51200

Page No. read losts statement Budget showing for the Manufacturing overhead a month of January favourable Actual 20000 Budgeted 20000 Undanourable level Voriable overhead lost :- Indirect labour Indirect material Repair Utilities lubricants 6300 3800 2700 1900 830 6ooo 4000 3000 2200 800 -300 u 200 E 300 300F -30 U F - Tatal Variable cost 4TO E 16000 15530 Add: fixed overhead cost . Supervision deprecation insurance Rent art coor Property Taxes Total Fixed lost one Total Manufacturing Overhead lost 75000 30000 12000 6ooo 9000 132000 7 500 30000 12000 6000 9000 132000 148000 1 147530 I 470F