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P21_Cook Company _Manfacturing Budgets




P21-1A - Prepare flexible budget and budget report for manufacturing overhead.;Cook Company estimates that 3,60,000 direct 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 Costs Variable Overhead Costs;Supervision $90,000 Indirect labor $1,26,000;Depreciation 60,000 Indirect materials 90,000;Insurance 30,000 Repairs 54,000;Rent 24,000 Utilities 72,000;Property taxes 18,000 Lubricants 18,000;$2,22,000 $3,60,000;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 Variable Overhead Costs;Supervision $7,500 Indirect labor $10,360;Depreciation 5,000 Indirect materials 6,400;Insurance 2,470 Repairs 4,000;Rent 2,000 Utilities 5,700;Property taxes 1,500 Lubricants 1,640;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, 2012.;(b) Prepare a flexible budget report for October.;(c) Comment on management's efficiency in controlling manufacturing overhead costs in October.


Paper#81532 | Written in 18-Jul-2015

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