Prepare flexible budget and budget report for manufacturing overhead. Cook Compa
ID: 2477711 • Letter: P
Question
Prepare flexible budget and budget report for manufacturing overhead.
Cook Company estimates that 300, 000 direct labor hours will be worked during the coming year, 2014, 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
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 $4,800, 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, 2014.
(a) Total costs: DLH 27,000, $52,400; DLH 36,000, $63,200.
(B) Prepare a flexible budget report for October.
(b) Total $1,232 U
(My job is to put all this information into spreadsheet using excel, please help)
Supervision $96,000 Depreciation 72,000 Insurance 30,000 Rent 24,000 Property taxes 18,000 $240,000Explanation / Answer
Cook Company All Amounts in $ (A) Monthly Manufacturing Overhead Flexible Budget for the year ended December 31, 2014 Fixed Overhead Costs Cost per month Supervision 96,000 8000 Depreciation 72,000 6000 Insurance 30,000 2500 Rent 24,000 2000 Property taxes 18,000 1500 2,40,000 20000 Variable Overhead Costs Cost per labour hour Indirect labor 1,26,000 0.42 Indirect materials 90,000 0.3 Repairs 54,000 0.18 Utilities 72,000 0.24 Lubricants 18,000 0.06 3,60,000 1.2 Overhead Cost Heading 27000 30000 33000 36000 Hours Hours Hours Hours Variable Overheads Indirect labor 11340 12600 13860 15120 Indirect materials 8100 9000 9900 10800 Repairs 4860 5400 5940 6480 Utilities 6480 7200 7920 8640 Lubricants 1620 1800 1980 2160 Total Variable Overheads 32400 36000 39600 43200 Fixed Overheads Supervision 8000 8000 8000 8000 Depreciation 6000 6000 6000 6000 Insurance 2500 2500 2500 2500 Rent 2000 2000 2000 2000 Property taxes 1500 1500 1500 1500 Total Fixed Overheads 20000 20000 20000 20000 Total Overheads 52400 56000 59600 63200 b) Flexible Budget Report for October (for 27,000 Labor Hours) Expense Head Budget Actual Variance Nature Variable Overheads Indirect labor 11340 12432 -1092 U Indirect materials 8100 7680 420 F Repairs 4860 4800 60 F Utilities 6480 6840 -360 U Lubricants 1620 1920 -300 U Total Variable Overheads 32400 33672 -1272 U Fixed Overheads Supervision 8000 8000 0 F Depreciation 6000 6000 0 F Insurance 2500 2460 40 F Rent 2000 2000 0 F Property taxes 1500 1500 0 F Total Fixed Overheads 20000 19960 40 F Total Overheads 52400 53632 -1232 U