Question

Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2020 contained the following data.

Variable Costs				Fixed Costs
Indirect materials		$11,200		Supervisory salaries		$36,300
Indirect labor		10,200		Depreciation		6,200
Utilities		7,700		Property taxes and insurance		7,100
Maintenance		6,000		Maintenance		4,000

Actual variable costs were indirect materials $14,800, indirect labor $9,300, utilities $9,500, and maintenance $5,200. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $9,200. The actual activity level equaled the budgeted level.

All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

(a) Prepare a manufacturing overhead flexible budget report for the first quarter. (List variable costs before fixed costs.)

Answer 1

Answer-a)-

CHUBBS INC.
Manufacturing Overhead Flexible Budget Report
For the First Quarter of 2020
Particulars	Flexible Budget	Actual Costs	Variances	Remark
	$	$	$
Variable costs:-
Indirect labor	10200	9300	900	Favorable
Indirect materials	11200	14800	-3600	Unfavorable
Utilities	7700	9500	-1800	Unfavorable
Maintenance	6000	5200	800	Favorable
Total variable costs (a)	35100	38800	-3700	Unfavorable
Fixed costs:-
Supervisory salaries	36300	36300	0	None
Depreication	6200	6200	0	None
Property Tax & insurance	7100	9200	-2100	Unfavorable
Maintenance	4000	4000	0	None
Total fixed costs (b)	53600	55700	0	None
Total cost (c=a+b)	88700	94500	-5800	Unfavorable