Answered: Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

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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		$1.10
Indirect materials		0.60
Utilities		0.40

Fixed overhead costs per month are Supervision $3,900, Depreciation $1,200, and Property Taxes $500. The company believes it will normally operate in a range of 7,400–11,300 direct labor hours per month.

Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs.

Variable Costs	Fixed Costs
Indirect labor	$10,730	Supervision	$3,900
Indirect materials	5,840	Depreciation	1,200
Utilities	3,530	Property taxes	500

(b) Prepare a flexible budget performance report, assuming that the company worked 9,400 direct labor hours during the month. (List variable costs before fixed costs.)

MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2020
			Difference
	Budget	Actual Costs	Favorable Unfavorable Neither Favorable nor Unfavorable
Select an opening overhead flexible budget report item DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	Enter a number	Enter a number
Select an opening name for section one DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
Select an overhead flexible budget report item DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$Enter a dollar amount	$Enter a dollar amount	$Enter the difference	Select an option UnfavorableFavorableNeither Favorable nor Unfavorable
Select an overhead flexible budget report item DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	Enter a dollar amount	Enter a dollar amount	Enter the difference	Select an option UnfavorableFavorableNeither Favorable nor Unfavorable
Select an overhead flexible budget report item DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	Enter a dollar amount	Enter a dollar amount	Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select a closing name for section one DepreciationDirect 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 the difference	Select an option UnfavorableFavorableNeither Favorable nor Unfavorable
Select an opening name for section two DepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
Select an overhead flexible budget report item	Enter a dollar amount	Enter a dollar amount	Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select an overhead flexible budget report item	Enter a dollar amount	Enter a dollar amount	Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select an overhead flexible budget report item	Enter a dollar amount	Enter a dollar amount	Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select a closing name for section two	Enter a total amount for section two	Enter a total amount for section two	Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select a closing flexible budget report item	$Enter a total dollar amount	$Enter a total dollar amount	$Enter the difference	Select an option UnfavorableFavorableNeither Favorable nor Unfavorable