Question P22-1A Bumblebee Company estimates that 300,000 direct labor hours, homework help
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You must complete all 3 parts (a, b, and c) of Problem P22-1A to earn full credit. You must submit your answers in Excel (only one Excel file will be graded – do not submit multiple Excel files). No Word document submissions will be graded.
P22-1A Bumblebee Company estimates that 300,000 direct labor hours will be worked during the coming year, 2017, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.
It is estimated that direct labor hours worked each month will range from 27,000 to 36,000 hours.
During October, 27,000 direct labor hours were worked and the following overhead costs were incurred.
- Fixed overhead costs: supervision $8,000, depreciation $6,000, insurance $2,460, rent $2,000, and property taxes $1,500.
- Variable overhead costs: indirect labor $12,432, indirect materials $7,680, repairs $6,100, utilities $6,840, and lubricants $1,920.
Instructions
(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,000 direct labor hours over the relevant range for the year ending December 31, 2017.
(a) Total costs: DLH 27,000, $53,750; DLH 36,000, $65,000
(b) Prepare a flexible budget report for October.
(b) Total $1,182 U
(c) Comment on management’s efficiency in controlling manufacturing overhead costs in October.
Prepare flexible budget, budget report, and graph for manufacturing overhead.
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