Flounder Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2027. 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 $46,800 Indirect materials 0.55 Depreciation 16.920 Factory utilities 0.32 Insurance 14,760 Factory repairs 0.20 Rent 28,080 The master overhead budget was prepared in the expectation that 479,200 direct labor hours will be worked during the year. In June, 46,100 direct labor hours were worked. At that level of activity, actual costs were as shown below Variable-per direct labor hour: indirect labor $0.44, indirect materials $0.54, factory utilities $0.35, and factory repairs $0.24. Fixed: same as budgeted.
Flounder Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2027. 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 $46,800 Indirect materials 0.55 Depreciation 16.920 Factory utilities 0.32 Insurance 14,760 Factory repairs 0.20 Rent 28,080 The master overhead budget was prepared in the expectation that 479,200 direct labor hours will be worked during the year. In June, 46,100 direct labor hours were worked. At that level of activity, actual costs were as shown below Variable-per direct labor hour: indirect labor $0.44, indirect materials $0.54, factory utilities $0.35, and factory repairs $0.24. Fixed: same as budgeted.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Flounder Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a
budgetary control system for 2027. 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
$46,800
Indirect materials
0.55
Depreciation
16.920
Factory utilities
0.32
Insurance
14,760
Factory repairs
0.20 Rent
28,080
The master overhead budget was prepared in the expectation that 479,200 direct labor hours will be worked during the year. In
June, 46,100 direct labor hours were worked. At that level of activity, actual costs were as shown below
Variable-per direct labor hour: indirect labor $0.44, indirect materials $0.54, factory utilities $0.35, and factory repairs $0.24.
Fixed: same as budgeted.
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