Question

Bramble 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		0.50
Utilities		0.30

Fixed overhead costs per month are Supervision $4,400, Depreciation $1,100, and Property Taxes $900. The company believes it will normally operate in a range of 7,500–10,500 direct labor hours per month.

Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,000 direct labor hours. (List variable costs before fixed costs.)

BRAMBLE COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2020 $ $ $ < $ $ $ $

Answer 1

Monthly Manufacturing Overhead Flexible Budget
For the Year 2020
Activity level
Direct labor hours	7,500	8,500	9,500	10,500
Variable costs
Indirect labor	7,500	8,500	9,500	10,500
Indirect materials	3,750	4,250	4,750	5,250
Utilities	2,250	2,550	2,850	3,150
Total variable cost	13,500	15,300	17,100	18,900
Fixed costs
Supervision	4,400	4,400	4,400	4,400
Depreciation	1,100	1,100	1,100	1,100
Property taxes	900	900	900	900
Total fixed costs	6,400	6,400	6,400	6,400
Total costs	19,900	21,700	23,500	25,300