Bumblebee Company estimates that 402,100 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year. Fixed Overhead Costs Variable Overhead Costs Supervision $91,800 Indirect labor $184,966 Depreciation 69,960 Indirect materials 104,546 Insurance 32,040 Repairs 64,336 Rent 22,560 Utilities 60,315 Property taxes 22,680 Lubricants 40,210 $239,040 $454,373 It is estimated that direct labor hours worked each month will range from 20,400 to 30,000 hours. During October, 20,400 direct labor hours were worked and the following overhead costs were incurred. Fixed overhead costs: Supervision $7,650, Depreciation $5,830, Insurance $2,615, Rent $1,880, and Property taxes $1,890. Variable overhead costs: Indirect labor $10,484, Indirect materials, $4,874, Repairs $3,214, Utilities $3,370, and Lubricants $2,380. (a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,200 direct labor hours over the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.) (b) Prepare a flexible budget report for October. (List variable costs before fixed costs.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

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Bumblebee Company estimates that 402,100 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.

Fixed Overhead Costs	Variable Overhead Costs
Supervision	$91,800	Indirect labor	$184,966
Depreciation	69,960	Indirect materials	104,546
Insurance	32,040	Repairs	64,336
Rent	22,560	Utilities	60,315
Property taxes	22,680	Lubricants	40,210
	$239,040		$454,373

It is estimated that direct labor hours worked each month will range from 20,400 to 30,000 hours.

During October, 20,400 direct labor hours were worked and the following overhead costs were incurred.

Fixed overhead costs: Supervision $7,650, Depreciation $5,830, Insurance $2,615, Rent $1,880, and Property taxes $1,890.

Variable overhead costs: Indirect labor $10,484, Indirect materials, $4,874, Repairs $3,214, Utilities $3,370, and Lubricants $2,380.

(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,200 direct labor hours over the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.)

(b) Prepare a flexible budget report for October. (List variable costs before fixed costs.)

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