Grouper Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2022. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs   Rate per Direct Labor Hour   Annual Fixed Costs Indirect labor   $0.43   Supervision   $44,880 Indirect materials   0.52   Depreciation   18,000 Factory utilities   0.30   Insurance   17,880 Factory repairs   0.20   Rent   28,680 The master overhead budget was prepared in the expectation that 482,900 direct labor hours will be worked during the year. In June, 44,800 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable—per direct labor hour: indirect labor $0.45, indirect materials $0.50, factory utilities $0.33, and factory repairs $0.24. Fixed: same as budgeted. Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2022, assuming production levels range from 43,700 to 57,200 direct labor hours. Dear increments of 4,500 direct labor hours. Also, prepare a budget report for June comparing actual results with budget data based on the flexible budget

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Grouper Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2022. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours.

Variable costs
 
Rate per Direct
Labor Hour
 
Annual Fixed Costs
Indirect labor
  $0.43  
Supervision
  $44,880
Indirect materials
  0.52  
Depreciation
  18,000
Factory utilities
  0.30  
Insurance
  17,880
Factory repairs
  0.20  
Rent
  28,680


The master overhead budget was prepared in the expectation that 482,900 direct labor hours will be worked during the year. In June, 44,800 direct labor hours were worked. At that level of activity, actual costs were as shown below.

Variable—per direct labor hour: indirect labor $0.45, indirect materials $0.50, factory utilities $0.33, and factory repairs $0.24.

Fixed: same as budgeted.

Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2022, assuming production levels range from 43,700 to 57,200 direct labor hours. Dear increments of 4,500 direct labor hours. Also, prepare a budget report for June comparing actual results with budget data based on the flexible budget.

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State the equation for computing the total budgeted costs for the ironing department.

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