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		0.30

Fixed overhead costs per month are Supervision $4,100, Depreciation $1,000, and Property Taxes $500. The company believes it will normally operate in a range of 5,800–10,600 direct labor hours per month.

Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,600 direct labor hours. (List variable costs before fixed costs.)

MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017
select an opening budget itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
select a Budget itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 oneActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
select a Budget itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 oneActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 twoActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
select a Budget itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 twoActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs 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 itemActivity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costse
		$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

Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,600 direct labor hours. MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2017 Activity Level Direct Labor Hours 5,800 7,400 9,000 10,600 Variable Costs Indirect Labor $5,800 $7,400 $9,000 $10,600 Indirect Materials 2,900 3,700 4,500 5,300 Utilities 1,740 2,220 2,700 3,180 Total Variable Costs 10,440 13,320 16,200 19.080 Fixed Costs Supervision 4,100 4,100 4,100 4,100 Depreciation 1,000 1,000 1,000 1,000 Property Taxes 500 500 500 500 Total Fixed Costs 5,600 5,600 5,600 5,600 Total Costs $16,040 $18,920 $21,800 $24,680 Explanation: 5.800 7,400| 7,400 9,000 10,600 Activity Level Direct Labor Hours Variable Costs Indirect Labor Indirect Materials Utilities (5,800 * $1.00) = $5,800 (5,800 * $0.50) = $2,900 |(5,800 * $0.30) = $1,740 (7,400 * $1.00) = $7,400 (9,000 * $1.00) = $9,000 (7,400 * $0.50) = $3,700 (9,000 * $0.50) = $4,500 (7,400 * $0.30) = $2,220 (9,000 * $0.30) = $2,700 (10,600 * $1.00) = $10,600 (10,600 * $0.50) = $5,300 (10,600 * $0.30) = $3,180