Prepare flexible budget and budget report for manufacturing overhead Bumblebee Company estimates that 300,000 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data, shown below, are computed for the year. Fixed Overhead Costs Variable Overhead Costs Supervision $96,000 Indirect labor $126,000 Depreciation 72,000 Indirect materials 90,000 Insurance 30,000 Repairs 69,000 Rent 24,000 Utilities 72,000 Property taxes 18,000 Lubricants 18,000 $240,000 $375,000 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, 2020. (b) Prepare a flexible budget report for October. (c ) Comment on management's efficiency in controlling manufacturing overhead costs in October. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (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, 2020. BUMBLEBEE COMPANY Packaging Department Monthly Manufacturing Overhead Flexible Budget For the Year 2020 Activity level Direct labor hours 27,000 30,000 33,000 36,000 Variable costs Indirect labor ($0.42) ? ? ? ? Indirect materials ($0.30) ? ? ? ? Repairs ($0.23) ? ? ? ? Utilities ($0.24) ? ? ? ? Lubricants ($0.06) ? ? ? ? Total variable costs ($1.25) ? ? ? ? Fixed costs Supervision ? ? ? ? Depreciation ? ? ? ? Insurance ? ? ? ? Rent ? ? ? ? Property taxes ? ? ? ? Total fixed costs ? ? ? ? Total costs ? ? ? ? (b) Prepare a flexible budget report for October. BUMBLEBEE COMPANY Packaging Department Manufacturing Overhead Flexible Budget Report For the Month Ended October 31, 2020 Difference Budget at Actual Costs Favorable F Direct labor hours 27,000 DLH 27,000 DLH Unfavorable U Variable costs Indirect labor ($0.42) ? Value ? Indirect materials ($0.30) ? Value ? Repairs ($0.23) ? Value ? Utilities ($0.24) ? Value ? Lubricants ($0.06) ? Value ? Total variable costs ($1.25) ? ? ? Fixed costs Supervision Value Value ? Depreciation Value Value ? Insurance Value Value ? Rent Value Value ? Property taxes Value Value ? Total fixed costs ? ? ? Total costs ? ? ? (c) Comment on management's efficiency in controlling manufacturing overhead costs in October. After you have completed P23-1A consider the following additional question. 1. Assume that during October, the actual direct labor hours worked changed to 27,500 hours. In addition, actual variable overhead costs incurred for indirect labor and indirect materials also changed to $13,500 and $8,200 respectively. Revise the flexible budget report for October

Prepare flexible budget and budget report for manufacturing overhead Bumblebee Company estimates that 300,000 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data, shown below, are computed for the year. Fixed Overhead Costs Variable Overhead Costs Supervision $96,000 Indirect labor $126,000 Depreciation 72,000 Indirect materials 90,000 Insurance 30,000 Repairs 69,000 Rent 24,000 Utilities 72,000 Property taxes 18,000 Lubricants 18,000 $240,000 $375,000 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, 2020. (b) Prepare a flexible budget report for October. (c ) Comment on management's efficiency in controlling manufacturing overhead costs in October. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (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, 2020. BUMBLEBEE COMPANY Packaging Department Monthly Manufacturing Overhead Flexible Budget For the Year 2020 Activity level Direct labor hours 27,000 30,000 33,000 36,000 Variable costs Indirect labor ($0.42) ? ? ? ? Indirect materials ($0.30) ? ? ? ? Repairs ($0.23) ? ? ? ? Utilities ($0.24) ? ? ? ? Lubricants ($0.06) ? ? ? ? Total variable costs ($1.25) ? ? ? ? Fixed costs Supervision ? ? ? ? Depreciation ? ? ? ? Insurance ? ? ? ? Rent ? ? ? ? Property taxes ? ? ? ? Total fixed costs ? ? ? ? Total costs ? ? ? ? (b) Prepare a flexible budget report for October. BUMBLEBEE COMPANY Packaging Department Manufacturing Overhead Flexible Budget Report For the Month Ended October 31, 2020 Difference Budget at Actual Costs Favorable F Direct labor hours 27,000 DLH 27,000 DLH Unfavorable U Variable costs Indirect labor ($0.42) ? Value ? Indirect materials ($0.30) ? Value ? Repairs ($0.23) ? Value ? Utilities ($0.24) ? Value ? Lubricants ($0.06) ? Value ? Total variable costs ($1.25) ? ? ? Fixed costs Supervision Value Value ? Depreciation Value Value ? Insurance Value Value ? Rent Value Value ? Property taxes Value Value ? Total fixed costs ? ? ? Total costs ? ? ? (c) Comment on management's efficiency in controlling manufacturing overhead costs in October. After you have completed P23-1A consider the following additional question. 1. Assume that during October, the actual direct labor hours worked changed to 27,500 hours. In addition, actual variable overhead costs incurred for indirect labor and indirect materials also changed to $13,500 and $8,200 respectively. Revise the flexible budget report for October

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Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 13E: Flexible overhead budget Leno Manufacturing Company prepared the following factory overhead cost...

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Question

P23-1A Prepare flexible budget and budget report for manufacturing overhead

Bumblebee Company estimates that 300,000 direct labor hours will be worked during the coming year, 2020,

in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data, shown below,

are computed for the year.

Fixed Overhead Costs

Variable Overhead Costs

Supervision

$96,000

Indirect labor

$126,000

Depreciation

72,000

Indirect materials

90,000

Insurance

30,000

Repairs

69,000

Rent

24,000

Utilities

72,000

Property taxes

18,000

Lubricants

18,000

$240,000

$375,000

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, 2020.

(b) Prepare a flexible budget report for October.

(c ) Comment on management's efficiency in controlling manufacturing overhead costs in October.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

(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, 2020.

BUMBLEBEE COMPANY

Packaging Department

Monthly Manufacturing Overhead Flexible Budget

For the Year 2020

Activity level

Direct labor hours

27,000

30,000

33,000

36,000

Variable costs

Indirect labor ($0.42)

Indirect materials ($0.30)

Repairs ($0.23)

Utilities ($0.24)

Lubricants ($0.06)

Total variable costs ($1.25)

Fixed costs

Supervision

Depreciation

Insurance

Rent

Property taxes

Total fixed costs

Total costs

(b)

Prepare a flexible budget report for October.

BUMBLEBEE COMPANY

Packaging Department

Manufacturing Overhead Flexible Budget Report

For the Month Ended October 31, 2020

Difference

Budget at

Actual Costs

Favorable F

Direct labor hours

27,000 DLH

Unfavorable U

Variable costs

Indirect labor ($0.42)

Value

Indirect materials ($0.30)

Value

Repairs ($0.23)

Value

Utilities ($0.24)

Value

Lubricants ($0.06)

Value

Total variable costs ($1.25)

Fixed costs

Supervision

Value

Depreciation

Value

Insurance

Value

Rent

Value

Property taxes

Value

Total fixed costs

Total costs

(c)

Comment on management's efficiency in controlling manufacturing overhead costs in October.

After you have completed P23-1A consider the following additional question.

Assume that during October, the actual direct labor hours worked changed to 27,500 hours.

In addition, actual variable overhead costs incurred for indirect labor and indirect materials

also changed to $13,500 and $8,200 respectively. Revise the flexible budget report for

October.

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