Question

roblem 22-2A (Part Level Submission) Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. 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 $41,040 Indirect materials 0.51 Depreciation 16,080 Factory utilities 0.30 Insurance 13,800 Factory repairs 0.20 Rent 29,520 The master overhead budget was prepared on the expectation that 478,700 direct labor hours will be worked during the year. In June, 38,800 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable—per direct labor hour: indirect labor $0.47, indirect materials $0.49, factory utilities $0.32, and factory repairs $0.25. Fixed: same as budgeted. Collapse question part (a) & (b) (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2017, assuming production levels range from 39,600 to 53,700 direct labor hours. Use increments of 4,700 direct labor hours. (List variable costs before fixed costs.) ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2017 $ $ $ $ $ $ $ $ (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) ZELMER COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2017 Difference Budget Actual Costs Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $ Click if you would like to Show Work for this question: Open Show Work

Answer 1