Thome Company uses a flexible budget for
manufacturing overhead based on direct labor hours. Variable manufacturing
overhead costs per direct labor hour are as follows
E10-3 Thome 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
|
$1.00
|
|
Indirect materials
|
0.60
|
|
Utilities
|
0.40
|
|
Fixed overhead costs
per month are:
|
Supervision
|
$4,000
|
|
Depreciation
|
1,200
|
|
|
Property Taxes
|
800
|
The company believes it will normally operate in a
range of 7,000 to 10,000 direct labor hours per month.
Instructions
Prepare a monthly manufacturing overhead flexible
budget for 2014 for the expected range of activity, using increments of 1,000
direct labor hours.
Prepare a monthly manufacturing overhead flexible
budget for 2014 for the expected range of activity, using increments of 1,000
direct labor hours.
THOME
COMPANY
Monthly
Manufacturing Overhead Flexible Budget
For
the Year 2014
|
Activity level Direct
labor hours
|
7,000
|
8,000
|
9,000
|
10,000
|
|
Variable costs
|
||||
|
Indirect labor ($1)
|
$7,000
|
$8,000
|
$9,000
|
$10,000
|
|
Indirect materials
($0.60)
|
4,200
|
4,800
|
5,400
|
6,000
|
File name: E10-3 Thome.xls File type: xls-template PRICE: $4
