Question

lexible Budget Application The polishing department of Taylor Manufacturing Company operated during April 2016 with the...

lexible Budget Application
The polishing department of Taylor Manufacturing Company operated during April 2016 with the following manufacturing overhead cost budget based on 5,000 hours of monthly productive capacity:

Taylor Manufacturing Company
Polishing Department
Overhead Budget (5,000 Hours)
For the Month of April 2016
Variable costs:
   Factory supplies $100,000
   Indirect labor 152,000
   Utilities 68,000
   Patent royalties on secret process 296,000
       Total variable overhead $616,000
Fixed costs:
   Supervisory salaries 160,000
   Depreciation on factory equipment 144,000
   Factory taxes 48,000
   Factory insurance 32,000
   Utilities (base charge) 80,000
       Total fixed overhead 464,000
Total manufacturing overhead $1,080,000

The polishing department was operated for 4,500 hours during April and incurred the following manufacturing overhead costs:

Factory supplies $97,470
Indirect labor 136,110
Utilities (usage factor) 82,800
Utilities (base factor) 96,000
Patent royalties 280,366
Supervisory salaries 167,000
Depreciation on factory equipment 144,000
Factory taxes 55,000
Factory insurance 32,000
Total manufacturing overhead incurred $1,090,746

Using a flexible budgeting approach, prepare a performance report for the polishing department for April 2016, comparing actual overhead costs with budgeted overhead costs for 4,500 hours. Separate overhead costs into variable and fixed components and show the amounts of any variances between actual and budgeted amounts.

Do not use negative signs with your answers below.
Do not round until your final answer. Round answers to nearest whole number, if applicable.
Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers.

Taylor Manufacturing Company
Polishing Department
Performance Report - Manufacturing Overhead
For the Month Ended April 30, 2016
Actual Costs Budget (4,500 hours) Variances
Variable costs:
    Factory supplies $Answer $Answer $Answer AnswerFU
    Indirect labor Answer Answer Answer AnswerFU
    Utilities Answer Answer Answer AnswerFU
    Patent royalties Answer Answer Answer AnswerFU
        Total variable overhead Answer Answer Answer AnswerFU
Fixed costs:
    Supervisory salaries Answer Answer Answer AnswerFU
    Depreciation on equipment Answer Answer Answer
    Factory taxes Answer Answer Answer AnswerFU
    Factory insurance Answer Answer Answer
    Utilities Answer Answer Answer AnswerFU
        Total fixed overhead Answer Answer Answer AnswerFU
Total overhead costs $Answer $Answer $Answer Answer

Homework Answers

Answer #1

Budgeted hours = 5,000

Factory Supplies = $100,000
Factory Supplies per hour = $100,000 / 5,000
Factory Supplies per hour = $20.00

Indirect Labor = $152,000
Indirect Labor per hour = $152,000 / 5,000
Indirect Labor per hour = $30.40

Utilities = $68,000
Utilities per hour = $68,000 / 5,000
Utilities per hour = $13.60

Patent Royalties on Secret Process = $296,000
Patent Royalties on Secret Process per hour = $296,000 / 5,000
Patent Royalties on Secret Process per hour = $59.20

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