Question

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: $1.00, Indirect Materials: $.70, Utilities: $.40

Fixed overhead costs per month are supervision, $4,000, depreciation $1,200, property tax $ 800. Operating in a range of 7,000-10,000 direct labor hours per month.

Prepare a month manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,000 direct labor hours.

Answer 1

Prepare a month manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,000 direct labor hours.

Activity level
Direct labor hours	7000	8000	9000	10000
variable manufacturing overhead
Indirect labor	7000	8000	9000	10000
Indirect material	4900	5600	6300	7000
Utilities	2800	3200	3600	4000
Total variable manufacturing overhead	14700	16800	18900	21000
Fixed manufacturing overhead
Supervision	4000	4000	4000	4000
Depreciation	1200	1200	1200	1200
Property taxes	800	800	800	800
Total fixed manufacturing overhead	6000	6000	6000	6000
Total manufacturing overhead	20700	22800	24900	27000