Problem 6 (Flexible Budget) Factory Overhead Flexible Budget Preparation Summary flexible overhead budgets are to be prepared for two departments of Summer Machine Company. Budget data follows: Department 1 Manufacturing overhead varies at the rate of P6.50 for each machine hour, and the fixed manufacturing overhead is budgeted for the year at P300,000. At normal capacity, the department should operate at 200,000 machine hours. Department 2 Manufacturing overhead varies at the rate of P7.00 for each direct labor hour, and the fixed manufacturing overhead is budgeted for the year at P500,000. At normal capacity, the department should operate at 400,000 machine hours. One direct labor is equal to two machine hours. Required: Prepare in summary form a flexible budget for each department showing costs at normal capacity, at 90, 80, 70, and 60 percent of normal сapаcity.

Problem 6 (Flexible Budget) Factory Overhead Flexible Budget Preparation Summary flexible overhead budgets are to be prepared for two departments of Summer Machine Company. Budget data follows: Department 1 Manufacturing overhead varies at the rate of P6.50 for each machine hour, and the fixed manufacturing overhead is budgeted for the year at P300,000. At normal capacity, the department should operate at 200,000 machine hours. Department 2 Manufacturing overhead varies at the rate of P7.00 for each direct labor hour, and the fixed manufacturing overhead is budgeted for the year at P500,000. At normal capacity, the department should operate at 400,000 machine hours. One direct labor is equal to two machine hours. Required: Prepare in summary form a flexible budget for each department showing costs at normal capacity, at 90, 80, 70, and 60 percent of normal сapаcity.

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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