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Cheyenne Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2022. 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 Indirect labor Indirect materials Factory utilities Factory repairs Rate per Direct Labor Hour $0.41 0.51 Fixed: same as budgeted. 0.31 Annual Fixed Costs Supervision $43,440 Depreciation Insurance 0.24 Rent 19,800 15,720 30,840 The master overhead budget was prepared in the expectation that 479,400 direct labor hours will be worked during the year. In June, 45,300 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.45, indirect materials $0.49, factory utilities $0.33, and factory repairs $0.29.

Cheyenne Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2022. 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 Indirect labor Indirect materials Factory utilities Factory repairs Rate per Direct Labor Hour $0.41 0.51 Fixed: same as budgeted. 0.31 Annual Fixed Costs Supervision $43,440 Depreciation Insurance 0.24 Rent 19,800 15,720 30,840 The master overhead budget was prepared in the expectation that 479,400 direct labor hours will be worked during the year. In June, 45,300 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.45, indirect materials $0.49, factory utilities $0.33, and factory repairs $0.29.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2022, assuming production levels range from 37,400 to 52,400 direct labor hours. Use increments of 5,000 direct labor hours. (List variable costs before fixed costs.) (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.)
Transcribed Image Text:(a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2022, assuming production levels range from 37,400 to 52,400 direct labor hours. Use increments of 5,000 direct labor hours. (List variable costs before fixed costs.) (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.)
Cheyenne Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2022. 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 Indirect labor Indirect materials Factory utilities Factory repairs Rate per Direct Labor Hour $0.41 Fixed: same as budgeted. 0.51 0.31 0.24 Annual Fixed Costs Supervision Depreciation Insurance Rent $43,440 19,800 15,720 30,840 The master overhead budget was prepared in the expectation that 479,400 direct labor hours will be worked during the year. In June, 45,300 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.45, indirect materials $0.49, factory utilities $0.33, and factory repairs $0.29.
Transcribed Image Text:Cheyenne Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2022. 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 Indirect labor Indirect materials Factory utilities Factory repairs Rate per Direct Labor Hour $0.41 Fixed: same as budgeted. 0.51 0.31 0.24 Annual Fixed Costs Supervision Depreciation Insurance Rent $43,440 19,800 15,720 30,840 The master overhead budget was prepared in the expectation that 479,400 direct labor hours will be worked during the year. In June, 45,300 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.45, indirect materials $0.49, factory utilities $0.33, and factory repairs $0.29.
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