Answer:
Myers Company
A Monthly Manufacturing Overhead Flexible Budget for 2017:
Operating Ranges Per Hour 7,000 8,200 9,400 10,600
Variable costs:
Indirect labor $1.00 $7,000 $8,200 $9,400 $10,600
Indirect materials 0.70 4,900 5,740 6,580 7,420
Utilities 0.20 1,400 1,640 1,880 2,120
Total variable costs $13,300 $15,580 $17,860 $20,140
Fixed overhead costs per month:
Supervision $4,000 4,000 4,000 4,000 4,000
Depreciation $1,000 1,000 1,000 1,000 1,000
Property Taxes $500 500 500 500 500
Total fixed costs $5,500 $5,500 $5,500 $5,500
Total costs $18,800 $21,080 $23.360 $25,640
Explanation:
a) Data and Calculations:
Variable manufacturing overhead costs per direct labor hour:
Indirect labor $1.00
Indirect materials 0.70
Utilities 0.20
Total variable per unit = $1.90
Fixed overhead costs per month:
Supervision $4,000
Depreciation $1,000
Property Taxes $500
Operation range of direct labor hours = 7,000 - 10,600
Increments of direct labor hours = 1,200
