manufacturing overhead costs per direct labor hour are as follows. Indirect labor Indirect materials Utilities $1.00 0.70 0.40 Budgeted fixed overhead costs per month are Supervision $3,280, Depreciation $984, and property Taxes $656. The company believes it will normally operate in a range of 5,740-8,200 direct labor hours per month. Assume that in July 2022, Blue Spruce Company incurs the following manufacturing overhead cost Fixed Costs Variable Costs Indirect labor Indirect materials Utilities $7.216 4,756 2,624 Supervision Depreciation Property taxes $3,280 984 656 (a) Prepare a flexible budget performance report, assuming that the company worked 7,380 direct labor hours during the month. (List
manufacturing overhead costs per direct labor hour are as follows. Indirect labor Indirect materials Utilities $1.00 0.70 0.40 Budgeted fixed overhead costs per month are Supervision $3,280, Depreciation $984, and property Taxes $656. The company believes it will normally operate in a range of 5,740-8,200 direct labor hours per month. Assume that in July 2022, Blue Spruce Company incurs the following manufacturing overhead cost Fixed Costs Variable Costs Indirect labor Indirect materials Utilities $7.216 4,756 2,624 Supervision Depreciation Property taxes $3,280 984 656 (a) Prepare a flexible budget performance report, assuming that the company worked 7,380 direct labor hours during the month. (List
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:(a) Prepare a flexible budget performance report, assuming that the company worked 7,380 direct labor hours during the month. (List variable costs before fixed costs)
Budget
BLUE SPRUCE COMPANY
Manufacturing Overhead Flexible Budget Report
For the Month Ended July 31, 2022
Budget
Actual Costs
(b) Prepare a flexible budget performance report, assuming that the company worked 6,970 direct labor hours during the month. (List variable costs before foxed costs)
BLUE SPRUCE COMPANY
Manufacturing Overhead Flexible Budget Report
Difference
Favorable
Unfavorable
Actual Costs
Neither Favorable
nor Unfavorable
Difference
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Transcribed Image Text:Blue Spruce Company uses a flexible budget for manufacturing overhead based on direct labor hours. Budgeted variable
manufacturing overhead costs per direct labor hour are as follows.
Indirect labor
Indirect materials
Utilities
$1.00
0.70
Budgeted fixed overhead costs per month are Supervision $3,280, Depreciation $984, and property Taxes $656. The company
believes it will normally operate in a range of 5,740-8,200 direct labor hours per month.
Assume that in July 2022, Blue Spruce Company incurs the following manufacturing overhead costs.
Fixed Costs
Variable Costs
0.40
Utilities
Indirect labor
$7.216
Indirect materials 4,756
2,624
Supervision
Depreciation
Property taxes
$3,280
984
656
(a) Prepare a flexible budget performance report, assuming that the company worked 7,380 direct labor hours during the month. (List
variable costs before fixed costs)
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