Baxter's Inc. estimates that 376,800 direct labor hours will beworked during the coming year, 2014, in the Packaging Department.On this basis, the following budgeted manufacturing overhead costdata are computed for the year.
Fixed Overhead Costs
Variable Overhead Costs
Supervision $94,320
Indirect labor $131,880
Depreciation 62,160
Indirect materials 79,128
Insurance 30,360
Repairs 45,216
Rent 21,840
Utilities 90,432
Property taxes 22,320
Lubricants 26,376
$231,000
$373,032
It is estimated that direct labor hours worked each month willrange from 29,900 to 38,000 hours.
During October, 29,900 direct labor hours were worked and thefollowing overhead costs were incurred.
Fixed overhead costs: supervision $7,860, depreciation$5,180, insurance $2,503, rent $1,820, and property taxes$1,860.
Variable overhead costs: indirect labor $11,423, indirectmaterials, $5,939, repairs $3,534, utilities $7,452, and lubricants$2,508.
1. Prepare a monthly manufacturing overhead flexible budget foreach increment of 2,700 direct labor hours over the relevant rangefor the year ending December 31, 2014. (List variablecosts before fixed costs.)
2. Prepare a flexible budget report for October.(List variable costs before fixed costs. If answer iszero, please enter 0, do not leave any fieldsblank.)
3. Comment on managementâs efficiency in controllingmanufacturing overhead costs in October.
Baxter's Inc. estimates that 376,800 direct labor hours will beworked during the coming year, 2014, in the Packaging Department.On this basis, the following budgeted manufacturing overhead costdata are computed for the year.
Fixed Overhead Costs | Variable Overhead Costs | |||||
| Supervision | $94,320 | Indirect labor | $131,880 | |||
| Depreciation | 62,160 | Indirect materials | 79,128 | |||
| Insurance | 30,360 | Repairs | 45,216 | |||
| Rent | 21,840 | Utilities | 90,432 | |||
| Property taxes | 22,320 | Lubricants | 26,376 | |||
$231,000 | $373,032 | |||||
It is estimated that direct labor hours worked each month willrange from 29,900 to 38,000 hours.
During October, 29,900 direct labor hours were worked and thefollowing overhead costs were incurred.
Fixed overhead costs: supervision $7,860, depreciation$5,180, insurance $2,503, rent $1,820, and property taxes$1,860.
Variable overhead costs: indirect labor $11,423, indirectmaterials, $5,939, repairs $3,534, utilities $7,452, and lubricants$2,508.
1. Prepare a monthly manufacturing overhead flexible budget foreach increment of 2,700 direct labor hours over the relevant rangefor the year ending December 31, 2014. (List variablecosts before fixed costs.)
2. Prepare a flexible budget report for October.(List variable costs before fixed costs. If answer iszero, please enter 0, do not leave any fieldsblank.)
3. Comment on managementâs efficiency in controllingmanufacturing overhead costs in October.
