Johnson Company estimates that 378,500 direct labor hours will be worked during the coming year, 2020,...
Johnson Company estimates that 378,500 direct labor hours will be worked during the coming year, 2020, in the the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.
Fixed Overhead Costs
Property Taxes $18,480
Variable Overhead Costs
Indirect labor $166,540
Indirect materials $83,270
It is estimated that direct labor hours worked each month will range from 25,800 to 36,600 hours.
During October, 25,800 direct labor hours were worked and the following overhead costs were incurred.
Fixed overhead costs: Supervision $7,320, Depreciation $5,730, Insurance $2,460, Rent $2,030, and Property Taxes $1,540.
Variable overhead costs: Indirect labor $12,352, Indirect materials, $5,336, Repairs $2,510, Utilities $5,460, and Lubricants $2,304
(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,600 direct labor hours over the relevant range for the year ending December 31,2020.
(b) Prepare a flexible budget report for October.