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Martinez Company uses a flexible budget for manufacturing overhead based on direct labor hours. Budgeted...

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Accounting

Martinez 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

 $ 1.00

Indirect materials

 0.70

Utilities

 0.40

Budgeted fixed overhead costs per month are Supervision $ 3,840, Depreciation $ 1,152, and property Taxes $ 768. The company believes it will normally operate in a range of 6,720 9,600 direct labor hours per month. Assume that in July 2022, Martinez Company incurs the following manufacturing overhead costs.

image

(a) Prepare a flexible budget performance report, assuming that the company worked 8,640 direct labor hours during the month. (List variable costs before fixed costs.)

(b) Prepare a flexible budget performance report, assuming that the company worked 8,160 direct labor hours during the month. (List variable costs before fixed costs.)

Variable Costs Fixed Costs Indirect labor $ 8,448 Supervision $ 3,840 Indirect materials 5,568 Depreciation 1,152 Utilities 3,072 Property taxes 768

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