Reference no: EM132786072

Question - The manufacturing overhead budget for Reebles has the following items:

Variable costs

Indirect materials $25,000

Indirect labour $12,000

Maintenance $10,000

Manufacturing supplies $6,000

Total variable costs $53,000

Fixed costs

Supervision $17,000

Inspections $1,000

Insurance $2,000

Amortization $15,000

Total fixed costs $35,000

The budget was based on an estimated production of 2,000 units. During November, 1,500 units were produced, and the following costs were incurred:

Variable costs

Indirect materials $25,200

Indirect labour $13,500

Maintenance $8,200

Manufacturing supplies $5,100

Total variable costs $52,000

Fixed costs

Supervision $19,300

Inspections $1,200

Insurance $2,200

Amortization $14,700

Required -

a) Prepare a flexible manufacturing overhead budget and the actual manufacturing overhead report for month ended November.

b) Determine the difference in total variable costs, total fixed costs and total costs.

c) Determine the differences between budgeted and actual costs. (Budget Variances).

d) Identify the variances as favourable or unfavourable.