Reference no: EM133003948

Rainbow Ltd's manufacturing overhead budget for the first quarter of the current year was prepared on the basis of planned output of 4,000 units and contained the following data:

Variable costs                             Fixed costs
Indirect materials $12,000      Supervisor salaries $36,000
Indirect labour 10,000            Depreciation 7,000
Utilities 8,000                       Taxes and insurance 8,000
Maintenance 5,000                  Maintenance 5,000

1. Actual variable costs were: indirect materials $13,800, indirect labour $9,600, utilities $8,700, and maintenance $4,200.
2. Actual fixed costs equalled budgeted fixed costs except for taxes and insurance which were $8,400.
3. Actual output for the quarter was 4,500 units.
4. All costs are considered controllable by the production department manager, except for depreciation, and taxes and insurance.

Requirements

Problem (a) Prepare a flexible budget manufacturing overhead budget report for the quarter.

Problem (b) Which items from the budget report would be included in a responsibility report prepared for the production department manager?