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		$1.30
Indirect materials		0.60
Utilities		0.20

Fixed overhead costs per month are Supervision $4,000, Depreciation $1,600, and Property Taxes $700. The company believes it will normally operate in a range of 8,100–11,700 direct labor hours per month.

Prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,200 direct labor hours. (List variable costs before fixed costs.)

BRAMBLE COMPANY Monthly Manufacturing Overhead Flexible Budget For the Month 2017 Direct Labor Hours Variable Costs Indirect Labor Indirect Materials Utilities Total Variable Costs Fixed Costs Supervision Depreciation Property Taxes Total Fixed Costs Total Costs

Answer 1

Monthly Manufacturing Overhead Flexible Budget
For the Year 2017
Activity level
Direct labor hours	8100	9300	10500	11700
Variable costs
Indirect labor	10530	12090	13650	15210
Indirect materials	4860	5580	6300	7020
Utilities	1620	1860	2100	2340
Total variable cost	17010	19530	22050	24570
Fixed costs
Supervision	4000	4000	4000	4000
Depreciation	1600	1600	1600	1600
Property taxes	700	700	700	700
Total fixed costs	6300	6300	6300	6300
Total costs	23310	25830	28350	30870