Pronghorn Company estimates that 312,000 direct labor hours will be worked during the coming year, 2022, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year. Fixed Overhead Costs Variable Overhead Costs Supervision $99,840 Indirect labor $131,040 Depreciation 74,880 Indirect materials 93,600 Insurance 31,200 Repairs 71,760 Rent 24,960 Utilities 74,880 Property taxes 18,720 Lubricants 18,720 $249,600 $390,000 It is estimated that direct labor hours worked each month will range from 27,600 to 38,400 hours. During October, 27,600 direct labor hours were worked, and the following overhead costs were incurred. Fixed overhead costs: supervision $8,320, depreciation $6,240, insurance $2,556, rent $2,080, and property taxes $1,560. Variable overhead costs: indirect labor $12,921, indirect materials $7,992, repairs $6,242, utilities $7,104, and lubricants $1,992. (a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,600 direct labor hours over the relevant range for the year ending December 31, 2022. (List variable costs before fixed costs.)

Pronghorn Company estimates that 312,000 direct labor hours will be worked during the coming year, 2022, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year. Fixed Overhead Costs Variable Overhead Costs Supervision $99,840 Indirect labor $131,040 Depreciation 74,880 Indirect materials 93,600 Insurance 31,200 Repairs 71,760 Rent 24,960 Utilities 74,880 Property taxes 18,720 Lubricants 18,720 $249,600 $390,000 It is estimated that direct labor hours worked each month will range from 27,600 to 38,400 hours. During October, 27,600 direct labor hours were worked, and the following overhead costs were incurred. Fixed overhead costs: supervision $8,320, depreciation $6,240, insurance $2,556, rent $2,080, and property taxes $1,560. Variable overhead costs: indirect labor $12,921, indirect materials $7,992, repairs $6,242, utilities $7,104, and lubricants $1,992. (a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,600 direct labor hours over the relevant range for the year ending December 31, 2022. (List variable costs before fixed costs.)

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Description: Pronghorn Company estimates that 312,000 direct labor hours will be worked during the coming year, 2022, in the PackagingDepartment. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.Fixed Overhead Cost

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

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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Question

Pronghorn Company estimates that 312,000 direct labor hours will be worked during the coming year, 2022, in the Packaging
Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.
Fixed Overhead Costs
Variable Overhead Costs
Supervision
$99,840
Indirect labor
$131,040
Depreciation
74,880
Indirect materials
93,600
Insurance
31,200
Repairs
71,760
Rent
24,960 Utilities
74,880
Property taxes
18,720
Lubricants
18,720
$249,600
$390,000
It is estimated that direct labor hours worked each month will range from 27,600 to 38,400 hours.
During October, 27,600 direct labor hours were worked, and the following overhead costs were incurred.
Fixed overhead costs: supervision $8,320, depreciation $6,240, insurance $2,556, rent $2,000, and property taxes $1,560.
Variable overhead costs: indirect labor $12,921, indirect materials $7,992, repairs $6,242, utilities $7,104, and lubricants $1,992.
(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,600 direct labor hours over the relevant range
for the year ending December 31, 2022. (List variable costs before fixed costs.)
< < < <
PRONGHORN COMPANY
Packaging Department
Monthly Manufacturing Overhead Flexible Budget
For the Year 2022
(b) Prepare a flexible budget report for October. (List variable costs before fixed costs.)
PRONGHORN COMPANY
Packaging Department
Manufacturing Overhead Flexible Budget Report
Budget
Actual Costs
$

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