Answer and Explanation:
The preparation is presented below:
a. For manufacturing overhead flexible budget report is presented below:
Particulars Budget Actual Difference
Variable costs
Indirect Materials $11,300 $14,600 $3,300 U
Indirect labor $10,800 $9,400 $1,400 F
Utilities $7,200 $9,600 $2,400 U
Maintenance $5,900 $5,100 $800 F
Total variable costs $35,200 $38,700 $3,500 U
Fixed costs
Supervisory salaries $37,000 $37,000 0 N
Depreciation $6,000 $6,000 0 N
Prop.taxes & insurance $7,400 $8,700 $1,300 U
Maintenance $5,000 $5,000 0 N
total fixed costs $55,400 $56,700 $1,300 U
total costs $90,600 $95,400 $4,800 U
b. For Manufacturing overhead Responsibility Report
Particulars Budget Actual Difference
Controllable costs
Indirect materials $11,300 $14,600 $3,300 U
indirect labor $10,800 $9,400 $1,400 F
Utilities $7,200 $9,600 $2,400 U
Maintenance $10,900 $10,100 $800 F
Supervisory salaries $37,000 $37,000 0 N
total costs $77,200 $80,700 $3,500 U
The unfavorable variance is that variance in which the actual cost is greater than the budgeted variance and the favorable variance is that variance in which the actual cost is less than the budgeted variance
