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Q.1 Caterpillar Company uses a flexible budget for manufacturing overhead based on direct labor...

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Accounting

Q.1 Caterpillar Company uses a flexible budget for manufacturing overhead based on
direct labor hours. Variable manufacturing overhead costs per direct labor hour are as
follows.
Fixed overhead costs per month are: Supervision $4,000, Depreciation $3,000, and
Property Taxes $800. The company believes it will normally operate in a range of 7,000
10,000 direct labor hours per month.
Required >
Prepare a monthly flexible manufacturing overhead budget for 2025 for the expected
range of activity, using increments of 1,000 direct labor hours.
Assume that in May 2025, Caterpillar Company incurs the following manufacturing
overhead costs.
Prepare a flexible budget performance report, assuming that the company worked
9,000 direct labor hours during the month.
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