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 0.50 Utilities 0.20 Fixed overhead costs per month are Supervision $3,500, Depreciation $1,000, and Property Taxes $500. The company believes it will normally operate in a range of 5,500-8,500 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,000 direct labor hours. (List variable costs before fixed costs.) MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017 $ $ $

Answer 1

Monthly manufacturing overhead budget

For the year 2017

Activity level
Direct labor hour	5500	6500	7500	8500
variable overhead
Indirect labor	5500	6500	7500	8500
Indirect material	2750	3250	3750	4250
Utilities	1100	1300	1500	1700
Total variable cost	9350	11050	12750	14450
Fixed Overhead
Supervision	3500	3500	3500	3500
Depreciation	1000	1000	1000	1000
Property taxes	500	500	500	500
Total fixed overhead	5000	5000	5000	5000
Total overhead	14350	16050	17750	19450