Cook company estimates that 400400 direct labor hours will

Reference no: EM13581042

Cook Company estimates that 400,400 direct labor hours will be worked during the coming year, 2014, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data are computed for the year.

Fixed Overhead Costs		Variable Overhead Costs
Supervision	$86,760	Indirect labor	$164,164
Depreciation	76,560	Indirect materials	96,096
Insurance	29,640	Repairs	52,052
Rent	20,280	Utilities	100,100
Property taxes	18,000	Lubricants	24,024
	$231,240		$436,436

It is estimated that direct labor hours worked each month will range from 22,700 to 34,400 hours.

During October, 22,700 direct labor hours were worked and the following overhead costs were incurred.

Fixed overhead costs: Supervision $7,230, Depreciation $6,380, Insurance $2,436, Rent $1,690, and Property taxes $1,500.

Variable overhead costs: Indirect labor $10,327, Indirect materials, $5,133, Repairs $2,886, Utilities $5,998, and Lubricants $1,610.

Prepare a monthly manufacturing overhead flexible budget for each increment of 3,900 direct labor hours over the relevant range for the year ending December 31, 2014.

Reference no: EM13581042

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