Champion Company manufacturing overhead budget for the first quarter of 2016 contained the following data:
Variable Costs
Indirect materials $40,000
Indirect labor 24,000
Utilities 20,000
Maintenance 12,000
Fixed Costs
Supervisor’s salary $80,000
Depreciation 16,000
Property taxes 8,000
Actual variable costs for the first quarter were:
Indirect materials $37,200
Indirect labor 26,400
Utilities 21,000
Maintenance 10,600
Actual fixed costs were as expected except for property taxes which were $9,000. All costs are considered controllable by the department manager except for the supervisor’s salary.
Instructions Prepare a manufacturing overhead responsibility performance report for the first quarter
Step 1 Flexible manufacturing overhead Budget
Budgeted | Actual | Difference { F / U } | |
Variable Costs | |||
Indirect materials | $40,000 | $37,200 | $2,800 (F) |
Indirect labor | $24,000 | $26,400 | $2,400 (U) |
Utilities | $20,000 | $21,000 | $1,000 (U) |
Maintenance | $12,000 | $10,600 | $1,400 (F) |
Total Variable Cost | $96,000 | $95,200 | $800 (F) |
Fixed Costs: | |||
Supervisory salaries | $80,000 | $80,000 | |
Depreciation | $16,000 | $16,000 | |
Property taxes and insurance | $8,000 | $9,000 | $1,000 (U) |
Total Fixed Cost | $104,000 | $105,000 | $1,000(U) |
Total Cost | $200,000 | $200,200 | $200(U) |
Step 2 Manufacturing Overhead Responsibility Report
Controllable Costs | Budget | Actual | Difference (F/U) |
Indirect materials | $40,000 | $37,200 | $2,800 (F) |
Indirect labor | $24,000 | $26,400 | $2,400 (U) |
Utilities | $20,000 | $21,000 | $1,000 (U) |
Maintenance | $12,000 | $10,600 | $1,400 (F) |
Depreciation | $16,000 | $16,000 | 0 |
Property taxes | $8,000 | $9,000 | $1,000 (U) |
Total | $120,000 | $120,200 | $200(U) |
Champion Company manufacturing overhead budget for the first quarter of 2016
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