Problem 101A Fixed Overhead Costs Variable Overhead Costs 85

Problem 10-1A

Fixed Overhead Costs

Variable Overhead Costs

$85,440

$164,076

66,240

74,580

33,720

74,580

29,280

93,225

12,480

29,832

$227,160

$436,293

BUMBLEBEE COMPANY
Packaging Department
Monthly Manufacturing Overhead Flexible Budget
For the Year 2017

BUMBLEBEE COMPANY
Packaging Department
Manufacturing Overhead Flexible Budget Report
For the Month Ended October 31, 2017

Difference

Budget

Actual Costs

Favorable
Unfavorable
Neither Favorable
nor Unfavorable

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SUBMIT ANSWER

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Problem 10-1A

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Bumblebee Company estimates that 372,900 direct labor hours will be worked during the coming year, 2017, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data are computed for the year.

Fixed Overhead Costs	Variable Overhead Costs
Supervision	$85,440	Indirect labor	$164,076
Depreciation	66,240	Indirect materials	74,580
Insurance	33,720	Repairs	74,580
Rent	29,280	Utilities	93,225
Property taxes	12,480	Lubricants	29,832
	$227,160		$436,293

It is estimated that direct labor hours worked each month will range from 24,700 to 31,000 hours.

During October, 24,700 direct labor hours were worked and the following overhead costs were incurred.

Fixed overhead costs: Supervision $7,120, Depreciation $5,520, Insurance $2,785, Rent $2,440, and Property taxes $1,040.

Variable overhead costs: Indirect labor $11,888, Indirect materials, $4,570, Repairs $4,870, Utilities $6,475, and Lubricants $2,286.

(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 2,100 direct labor hours over the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)

BUMBLEBEE COMPANY Packaging Department Monthly Manufacturing Overhead Flexible Budget For the Year 2017
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$ $\"Entry$	$ $\"Entry$	$ $\"Entry$	$ $\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$ $\"Entry$	$ $\"Entry$	$ $\"Entry$	$ $\"Entry$

(b) Prepare a flexible budget report for October. (List variable costs before fixed costs.)

BUMBLEBEE COMPANY Packaging Department Manufacturing Overhead Flexible Budget Report For the Month Ended October 31, 2017
			Difference
	Budget	Actual Costs	Favorable Unfavorable Neither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$ $\"Entry$	$ $\"Entry$	$ $\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$\"Entry$	$\"Entry$	$\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable
$\"Entry$ Activity LevelDepreciationDirect LaborDirect Labor HoursDirect MaterialsFixed CostsIndirect LaborIndirect MaterialsInsuranceLubricantsProperty TaxesRentRepairsSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs	$ $\"Entry$	$ $\"Entry$	$ $\"Entry$	$\"Entry$ FavorableUnfavorableNeither Favorable nor Unfavorable

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1) activity level Direct labor hours 24,700 26,800 28,900 31,000 variable costs Indirect labor 0.44 10868 11792 12716 13640 indirect materials 0.2 4940 5360 5780 6200 repairs 0.2 4940 5360 5780 6200 utilities 0.25 6175 6700 7225 7750 lubricants 0.08 1976 2144 2312 2480 tota variable cost 1.17 28899 31356 33813 36270 Fixed expenses Supervision 7120 7120 7120 7120 Depreciation 5520 5520 5520 5520 insurance 2810 2810 2810 2810 Rent 2440 2440 2440 2440 property taxes 1040 1040 1040 1040 total fixed expenses 18930 18930 18930 18930 total cost 47829 50286 52743 55200 2) budget Actual difference activity level Direct labor hours 24,700 24,700 variable costs Indirect labor 0.44 10,868 11,888 1,020 U indirect materials 0.2 4940 4,570 370 F repairs 0.2 4940 4,870 70 F utilities 0.25 6175 6,475 300 U lubricants 0.08 1976 2,286 310 U tota variable cost 1.17 28899 30089 1190 U Fixed expenses Supervision 7120 7,120 0 N Depreciation 5520 5,520 0 N insurance 2810 2,785 25 F Rent property taxes 2440 2,440 0 N property taxes 1040 1,040 0 N total fixed expenses 18930 18,905 25 F total cost 47829 48994 1165 U

Problem 10-1A Fixed Overhead Costs Variable Overhead Costs $85,440 $164,076 66,240 74,580 33,720 74,580 29,280 93,225 12,480 29,832 $227,160 $436,293 BUMBLEBEE

Problem 101A Fixed Overhead Costs Variable Overhead Costs 85

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