Answer:
Explanation:
Given that :
Bumblebee Company estimates that 379,500 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 $94,440 Indirect labor $174,570
Depreciation 73,320 Indirect materials 75,900
Insurance 25,560 Repairs 53,130
Rent 21,120 Utilities 94,875
Property taxes 20,880 Lubricants 37,950
$235,320 $436,425
It is estimated that direct labor hours worked each month will range from 24,900 to 36,900 hours.
During October, 24,900 direct labor hours were worked and the following overhead costs were incurred.
Fixed overhead costs: Supervision $7,870, Depreciation $6,110, Insurance $2,095, Rent $1,760, and Property taxes $1,740.
Variable overhead costs: Indirect labor $12,544, Indirect materials, $4,500, Repairs $3,406, Utilities $6,545, and Lubricants $2,740.
The objective is to prepare a monthly manufacturing overhead flexible budget for each increment of 4,000 direct labor hours over the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.)
The monthly manufacturing overhead flexible budget can be computed as
follows:
Bumblebee Company
Packaging Department
Monthly manufacturing overhead Flexible
Budget For the year ended December 31,2017
Particulars Operating Capacity(Direct Labor Hours)
24900 28900 32900 36900
Variable Factory -
Overhead Costs :
Indirect labor 11454 13294 15134 16974
Indirect materials 4980 5780 6580 7380
Repairs 3486 4046 4606 5166
Utilities 6225 7225 8225 9225
Lubricants 2490 2890 3290 3690
<u>Total Variable Factory- </u>
<u>Overhead Cost 28635 33235 37835 42435 </u>
Fixed Factory -
Overhead Cost :
Supervision 7870 7870 7870 7870
Depreciation 6110 6110 6110 6110
Insurance 2130 2130 2130 2130
Rent 1760 1760 1760 1760
Property Taxes 1740 1740 1740 1740
<u>Total Fixed Factory - </u>
<u>Overhead Cost: 19610 19610 19610 19610 </u>
<u>Total Factory - </u>
<u>Overhead Cost (A+B) 48245 52845 57445 62045 </u>