Prepare flexible budget report

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Reference no: EM131202231

Ahmad Company uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows:

Indirect labor $5.00

Indirect materials 2.50

Maintenance .50

Utilities .30

Fixed overhead costs per month are:

Supervision $600

Insurance 200

Property taxes 300

Depreciation 900

The company believes it will normally operate in a range of 2,000 to 4,000 machine hours per month. During the month of August, 2015, the company incurs the following manufacturing overhead costs:

Indirect labor $14,000

Indirect materials 8,100

Maintenance 1,400

Utilities 950

Supervision 720

Insurance 200

Property taxes 300

Depreciation 930

Required:

Prepare a flexible budget report, assuming that the company used 3,000 machine hours during August.

Reference no: EM131202231

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