1. Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per direct labor hour Annual fixed costs Indirect labor $ 0.42 Supervision $ 42600 Indirect material $ 0.50 depreciation $ 17280 Factory utilities $ 0.33 insurance $ 14640 Factory repairs $ 0.23 rent $ 30600 The master overhead budget was prepared on the expectation that 481,600 direct labor hours will be worked during the year. In June, 38,400 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable—per direct labor hour: indirect labor $0.46, indirect materials $0.48, factory utilities $0.37, and factory repairs $0.28. Fixed: same as budgeted. Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 35,100 to 49,800 direct labor hours. Use increments of 4,900 direct labor hours. Prepare a budget report for June comparing actual results with budget data based on the flexible budget. State the formula for computing the total budgeted costs for the Ironing Department. (Consist of Fixed Costs and Variable Costs)
1. Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary
Variable costs |
Rate per direct labor hour |
Annual fixed costs |
||
Indirect labor |
$ 0.42 |
|
||
Indirect material |
$ 0.50 |
|
||
Factory utilities |
$ 0.33 |
|
||
Factory repairs |
$ 0.23 |
|
The
Variable—per direct labor hour: indirect labor $0.46, indirect materials $0.48, factory utilities $0.37, and factory repairs $0.28.
Fixed: same as budgeted.
- Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 35,100 to 49,800 direct labor hours. Use increments of 4,900 direct labor hours.
- Prepare a budget report for June comparing actual results with budget data based on the flexible budget.
- State the formula for computing the total budgeted costs for the Ironing Department. (Consist of Fixed Costs and Variable Costs)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)