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P21_Cook Company _Manfacturing Budgets




Question;P21-1A - Prepare flexible budget and budget report for manufacturing overhead.Cook Company estimates that3,60,000direct labor hours will be worked during the coming year,2012, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data, shown below, are computed for the year.Fixed Overhead CostsVariable Overhead CostsSupervision$90,000Indirect labor$1,26,000Depreciation60,000Indirect materials90,000Insurance30,000Repairs54,000Rent24,000Utilities72,000Property taxes18,000Lubricants18,000$2,22,000$3,60,000It is estimated that direct labor hours worked each month will range from27,000to36,000hours.During October,27,000direct labor hours were worked and the following overhead costs wereincurred.Fixed Overhead CostsVariable Overhead CostsSupervision$7,500Indirect labor$10,360Depreciation5,000Indirect materials6,400Insurance2,470Repairs4,000Rent2,000Utilities5,700Property taxes1,500Lubricants1,640Instructions:(a) Prepare a monthly manufacturing overhead flexible budget for each increment of3,000direct labor hoursover the relevant range for the year ending December 31, 2012.(b) Prepare a flexible budget report for October.(c) Comment on management's efficiency in controlling manufacturing overhead costs in October.


Paper#37517 | Written in 18-Jul-2015

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