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Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable...

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Accounting

Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.

Indirect labor $ 1.20
Indirect materials 0.80
Utilities 0.40

Fixed overhead costs per month are Supervision $ 3,600 , Depreciation $ 1,000 , and Property Taxes $ 900 . The company believes it will normally operate in a range of 8,000 13,700 direct labor hours per month. Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs.

Variable Costs

Fixed Costs
Indirect labor $ 13,920 Supervision $ 3,600
Indirect materials 9,320 Depreciation 1,000
Utilities 4,240 Property taxes 900

(a) Prepare a flexible budget performance report, assuming that the company worked 11,800 direct labor hours during the month. (List variable costs before fixed costs.)

(b) Prepare a flexible budget performance report, assuming that the company worked 11,200 direct labor hours during the month.

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