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Answer :
The monthly manufacturing overhead flexible budget for 2022, based on increments of 940 direct labor hours, is as follows: Variable costs: $2.30 per direct labor hour for the first 940 hours, $3.50 per direct labor hour , and so on.
Current Attempt in Progress Marigold Company uses a flexible budget for manufacturing overhead based on direct labor hours. Budgeted variable manufacturing overhead costs per direct labor hour are as follows:
Variable manufacturing overhead costs per direct labor hour: $2.30Variable manufacturing overhead costs per direct labor hour: $3.50In this case, the fixed cost of the manufacturing overhead is $6,200.
Prepare a monthly manufacturing overhead flexible budget for 2022 for the expected range of activity, using increments of 940 direct labor hours.
(List variable costs before fixed costs.)Calculation of variable costs:
Direct labor hour 940-1879:Total manufacturing overhead cost = (940 × $2.30) + $6,200 = $8,962
Direct labor hour 1880-2819:Total manufacturing overhead cost = (940 × $2.30) + (940 × $3.50) + $6,200 = $18,562
Direct labor hour 2820-3759:Total manufacturing overhead cost = (940 × $2.30) + (1880 × $3.50) + $6,200 = $28,162
Direct labor hour 3760-4699:Total manufacturing overhead cost = (940 × $2.30) + (2820 × $3.50) + $6,200 = $37,762
Direct labor hour 4700-5639:Total manufacturing overhead cost = (940 × $2.30) + (3760 × $3.50) + $6,200 = $47,362
The monthly manufacturing overhead flexible budget for 2022 for the expected range of activity, using increments of 940 direct labor hours is given above.
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