Problem 24-1A Cook Company_Manufacturing overhead_Flexible Budget

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Problem 24-1A

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Cook Company estimates that 362,200 direct labor hours will be worked during the coming year, 2014, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.

Fixed Overhead Costs

Variable Overhead Costs

Supervision

$88,440

Indirect labor

$112,282

Depreciation

62,400

Indirect materials

108,660

Insurance

30,480

Repairs

43,464

Rent

21,600

Utilities

76,062

Property taxes

13,080

Lubricants

28,976

$216,000

$369,444

It is estimated that direct labor hours worked each month will range from 22,600 to 31,900 hours.

During October, 22,600 direct labor hours were worked and the following overhead costs were incurred.

Fixed overhead costs: supervision $7,370, depreciation $5,200, insurance $2,496, rent $1,800, and property taxes $1,090.

Variable overhead costs: indirect labor $7,975, indirect materials, $6,457, repairs $2,658, utilities $5,038, and lubricants $2,137.

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Prepare a monthly manufacturing overhead flexible budget for each increment of 3,100 direct labor hours over the relevant range for the year ending December 31, 2014.(List variable costs before fixed costs.)

Prepare a flexible budget report for October

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Prepare a flexible budget report for October.

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