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Question & Answer: Exercise 24-4 Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable m…..

Exercise 24-4 Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows Indirect labor Indirect materials Utilities $1.00 0.50 0.30 Fixed overhead costs per month are Supervision $3,500, Depreciation $1,000, and Property Taxes $500. The company believes it will normally operate in a range of 5,500- 8,500 direct labor hours per month Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor Indirect materials Utilities $3,500 1,000 500 $%7,300 Supervision 3,650 Depreciation 1,850 Property taxes (a) Prepare a flexible budget performance report, assuming that the company worked 7,500 direct labor hours during the month. (List variable costs before fixed costs.)PLEASE FILL IN ACTUAL BLANKS OR MAKE VERY CLEAR. TY

Exercise 24-4 Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows Indirect labor Indirect materials Utilities $1.00 0.50 0.30 Fixed overhead costs per month are Supervision $3,500, Depreciation $1,000, and Property Taxes $500. The company believes it will normally operate in a range of 5,500- 8,500 direct labor hours per month Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor Indirect materials Utilities $3,500 1,000 500 $%7,300 Supervision 3,650 Depreciation 1,850 Property taxes (a) Prepare a flexible budget performance report, assuming that the company worked 7,500 direct labor hours during the month. (List variable costs before fixed costs.)

Expert Answer

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    Statementshowing Computations
    Paticulars Budget Actual Difference Fav or Unfav
    No of Hours           7,500.00                        7,500.00
    Variable Costs:
    Indirect Labour           7,500.00                        7,300.00                   200.00 F
    Indirect Material           3,750.00                        3,650.00                   100.00 F
    Utilities           2,250.00                        1,850.00                   400.00 F
    Total Variable Costs         13,500.00                     12,800.00                   700.00 F
    Fixed Costs:
    Supervision           3,500.00                        3,500.00                            – Neither F nor U
    Depreciation           1,000.00                        1,000.00                            – Neither F nor U
    Property Taxes               500.00                           500.00                            – Neither F nor U
    Total Fixed Costs           5,000.00                        5,000.00                            – Neither F nor U
    Total Costs         18,500.00                     17,800.00                   700.00 U
    Paticulars Budget Actual Difference Fav or Unfav
    No of Hours           7,000.00                        7,000.00
    Variable Costs:
    Indirect Labour           7,000.00                        7,300.00                (300.00) U
    Indirect Material           3,500.00                        3,650.00                (150.00) U
    Utilities           2,100.00                        1,850.00                   250.00 F
    Total Variable Costs         12,600.00                     12,800.00                (200.00) U
    Fixed Costs:
    Supervision           3,500.00                        3,500.00                            – Neither F nor U
    Depreciation           1,000.00                        1,000.00                            – Neither F nor U
    Property Taxes               500.00                           500.00                            – Neither F nor U
    Total Fixed Costs           5,000.00                        5,000.00                            – Neither F nor U
    Total Costs         17,600.00                     17,800.00                (200.00) U
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