In: Accounting
Bumblebee Company estimates that 318,000 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 |
$93,960 |
Indirect labor |
$152,640 |
|||
Depreciation |
69,120 |
Indirect materials |
89,040 |
|||
Insurance |
30,720 |
Repairs |
31,800 |
|||
Rent |
20,760 |
Utilities |
47,700 |
|||
Property taxes |
13,440 |
Lubricants |
15,900 |
|||
$228,000 |
$337,080 |
It is estimated that direct labor hours worked each month will
range from 22,500 to 33,900 hours.
During October, 22,500 direct labor hours were worked and the
following overhead costs were incurred.
Fixed overhead costs: Supervision $7,830, Depreciation $5,760,
Insurance $2,510, Rent $1,730, and Property taxes $1,120.
Variable overhead costs: Indirect labor $11,890, Indirect
materials, $5,920, Repairs $2,170, Utilities $3,775, and Lubricants
$1,415.
(a) Prepare a monthly manufacturing overhead
flexible budget for each increment of 3,800 direct labor hours over
the relevant range for the year ending December 31, 2020.
(List variable costs before fixed
costs.)