Question

Myers 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		0.40

Fixed overhead costs per month are Supervision $3,800, Depreciation $1,000, and Property Taxes $900. The company believes it will normally operate in a range of 8,100–12,000 direct labor hours per month.

Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,300 direct labor hours. (List variable costs before fixed costs.)

MYERS COMPANY Monthly Manufacturing Overhead Flexible Budget For the Year 2020
Select an opening overhead flexible budget item Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
Select an overhead flexible budget item Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		Enter a number		Enter a number		Enter a number		Enter a number
Select an opening name for section one Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
Select an overhead flexible budget item     Activity Level    Depreciation    Direct Labor Hours    Fixed Costs    Indirect Labor    Indirect Materials    Property Taxes    Supervision    Total Costs    Total Fixed Costs    Total Variable Costs    Utilities    Variable Costs		$Enter a dollar amount		$Enter a dollar amount		$Enter a dollar amount		$Enter a dollar amount
Select an overhead flexible budget item     Activity Level    Depreciation    Direct Labor Hours    Fixed Costs    Indirect Labor    Indirect Materials    Property Taxes    Supervision    Total Costs    Total Fixed Costs    Total Variable Costs    Utilities    Variable Costs		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount
Select an overhead flexible budget item     Activity Level    Depreciation    Direct Labor Hours    Fixed Costs    Indirect Labor    Indirect Materials    Property Taxes    Supervision    Total Costs    Total Fixed Costs    Total Variable Costs    Utilities    Variable Costs		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount
Select a closing name for section one     Activity Level    Depreciation    Direct Labor Hours    Fixed Costs    Indirect Labor    Indirect Materials    Property Taxes    Supervision    Total Costs    Total Fixed Costs    Total Variable Costs    Utilities    Variable Costs		Enter a total amount for section one		Enter a total amount for section one		Enter a total amount for section one		Enter a total amount for section one
Select an opening name for section two Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs
Select an overhead flexible budget item     Activity Level    Depreciation    Direct Labor Hours    Fixed Costs    Indirect Labor    Indirect Materials    Property Taxes    Supervision    Total Costs    Total Fixed Costs    Total Variable Costs    Utilities    Variable Costs		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount
Select an overhead flexible budget item     Activity Level    Depreciation    Direct Labor Hours    Fixed Costs    Indirect Labor    Indirect Materials    Property Taxes    Supervision    Total Costs    Total Fixed Costs    Total Variable Costs    Utilities    Variable Costs		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount
Select an overhead flexible budget item     Activity Level    Depreciation    Direct Labor Hours    Fixed Costs    Indirect Labor    Indirect Materials    Property Taxes    Supervision    Total Costs    Total Fixed Costs    Total Variable Costs    Utilities    Variable Costs		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount		Enter a dollar amount
Select a closing name for section two     Activity Level    Depreciation    Direct Labor Hours    Fixed Costs    Indirect Labor    Indirect Materials    Property Taxes    Supervision    Total Costs    Total Fixed Costs    Total Variable Costs    Utilities    Variable Costs		Enter a total amount for section two		Enter a total amount for section two		Enter a total amount for section two		Enter a total amount for section two
Select a closing overhead flexible budget item Activity LevelDepreciationDirect Labor HoursFixed CostsIndirect LaborIndirect MaterialsProperty TaxesSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesVariable Costs		$Enter a total amount for the overhead flexible budget		$Enter a total amount for the overhead flexible budget		$Enter a total amount for the overhead flexible budget		$Enter a total amount for the overhead flexible budget

Click if you would like to Show Work for this question:

Open Show Work

Answer 1

Monthly manufacturing overhead budget

For the year 2020

Activity level
Direct labor hour	8100	9400	10700	12000
variable overhead
Indirect labor	10530	12220	13910	15600
Indirect material	4860	5640	6420	7200
Utilities	3240	3760	4280	4800
Total variable cost	18630	21620	24610	27600
Fixed Overhead
Supervision	3800	3800	3800	3800
Depreciation	1000	1000	1000	1000
Property taxes	900	900	900	900
Total fixed overhead	5700	5700	5700	5700
Total overhead	24330	27320	30310	33300