Acc560 Managerial Accounting: E10-4 (a,b) Raney Company uses a flexible budget

Acc560 Managerial Accounting

E10-4 (a,b)
Raney 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 0.40
Fixed overhead costs per month are: Supervision $4,000, Depreciation $1,500, and Property Taxes $800. Assume that in July 2010, Raney Company incurs the following manufacturing overhead costs.
Variable Costs Fixed Costs
Indirect labor 8,700 Supervision 4,000
Indirect materials 4,300 Depreciation 1,500
Utilities 3,200 Property taxes 800

Instructions:
a. Prepare a flexible budget performance report, assuming that the company worked 9,000 direct labor hours during the month. (If answer is zero, please enter 0. Do not leave any fields blank.)
b. Prepare a flexible budget performance report, assuming that the company worked 8,500 direct labor hours during the month.
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