Reference no: EM13522038

Company assembles all of its products in the Assembly Department. Budgeted cost for the operation of this department for the year have been set as follows:

COMPANY
Budget costs for Assembly Department:
Variable costs:
Direct materials	$900,000
Direct labor	675,000
Utilities	45,000
Indirect labor	67,500
Supplies	22,500
Total variable costs	1,710,000
Fixed costs:
Insurance	8,000
Supervisory Salaries	90,000
Depreciation	160,000
Equipment rental	42,000
Total fixed costs	300,000
Total budgeted costs	$2,010,000
Budgeted direct labor-hours	75,000
Part 3: Actual activities and costs:
Actual direct labor-hours worked	73,000
Standard direct labor-hours allowed	70,000
Actual variable manufacturing overhead cost incurred	$124,100
Actual fixed manufacturing overhead cost incurred	301,600

Since the assembly work is done mostly by hand, operating activity in this department is best measured by direct labor-hours. The cost formulas used to develop the budgeted costs above are valid over a relevant range of 60,000 to 90,000 direct labor-hours per year.

Required:

1. Prepare a manufacturing overhead flexible budget for the Assembly Department using increments of 15,000 direct labor-hours. (The company does not include direct materials and direct labor costs in the flexible budget.)