Acc301 Essentials of Accounting: E8-3 Raney Company uses a flexible budget

Acc301 Essentials of Accounting

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
Property Taxes 800
The company believes it will normally operate in a range of 7,000 to 10,000 direct labor hours per month.

Prepare a monthly flexible manufacturing overhead budget for 2010 for the expected range of activity, using increments of 1,000 direct labor hours.
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