Question

Bumblebee Company estimates that 379,500 direct labor hours will be worked during the coming year, 2017,...

Bumblebee Company estimates that 379,500 direct labor hours will be worked during the coming year, 2017, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data are computed for the year.

Fixed Overhead Costs
Variable Overhead Costs
Supervision
$94,440
Indirect labor
$174,570
Depreciation
73,320
Indirect materials
75,900
Insurance
25,560
Repairs
53,130
Rent
21,120
Utilities
94,875
Property taxes
20,880
Lubricants
37,950
$235,320
$436,425


It is estimated that direct labor hours worked each month will range from 24,900 to 36,900 hours.

During October, 24,900 direct labor hours were worked and the following overhead costs were incurred.

Fixed overhead costs: Supervision $7,870, Depreciation $6,110, Insurance $2,095, Rent $1,760, and Property taxes $1,740.

Variable overhead costs: Indirect labor $12,544, Indirect materials, $4,500, Repairs $3,406, Utilities $6,545, and Lubricants $2,740.

(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 4,000 direct labor hours over the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)

BUMBLEBEE COMPANY
Packaging Department
Monthly Manufacturing Overhead Flexible Budget
For the Year 2017
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with correct answer]

Activity Level
Depreciation
Direct Labor
Direct Labor Hours
Direct Materials
Fixed Costs
Indirect Labor
Indirect Materials
Insurance
Lubricants
Property Taxes
Rent
Repairs
Supervision
Total Costs
Total Fixed Costs
Total Variable Costs
Utilities
Variable Costs
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
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$
[Entry field with incorrect answer]


(b) Prepare a flexible budget report for October. (List variable costs before fixed costs.)

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Homework Answers

Answer #1

Answer a.

Planning Budget:

Number of direct labor hours = 379,500

Indirect labor = $174,570
Indirect labor per direct labor hour = $174,570 / 379,500
Indirect labor per direct labor hour = $0.46

Indirect materials = $75,900
Indirect materials per direct labor hour = $75,900 / 379,500
Indirect materials per direct labor hour = $0.20

Repairs = $53,130
Repairs per direct labor hour = $53,130 / 379,500
Repairs per direct labor hour = $0.14

Utilities = $94,875
Utilities per direct labor hour = $94,875 / 379,500
Utilities per direct labor hour = $0.25

Lubricants = $37,950
Lubricants per direct labor hour = $37,950 / 379,500
Lubricants per direct labor hour = $0.10

Answer b.

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