Flounder Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2027. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per Direct Labor Hour Annual Fixed Costs Indirect labor $0.42 Supervision $46,800 Indirect materials 0.55 Depreciation 16.920 Factory utilities 0.32 Insurance 14,760 Factory repairs 0.20 Rent 28,080 The master overhead budget was prepared in the expectation that 479,200 direct labor hours will be worked during the year. In June, 46,100 direct labor hours were worked. At that level of activity, actual costs were as shown below Variable-per direct labor hour: indirect labor $0.44, indirect materials $0.54, factory utilities $0.35, and factory repairs $0.24. Fixed: same as budgeted.

Flounder Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2027. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per Direct Labor Hour Annual Fixed Costs Indirect labor $0.42 Supervision $46,800 Indirect materials 0.55 Depreciation 16.920 Factory utilities 0.32 Insurance 14,760 Factory repairs 0.20 Rent 28,080 The master overhead budget was prepared in the expectation that 479,200 direct labor hours will be worked during the year. In June, 46,100 direct labor hours were worked. At that level of activity, actual costs were as shown below Variable-per direct labor hour: indirect labor $0.44, indirect materials $0.54, factory utilities $0.35, and factory repairs $0.24. Fixed: same as budgeted.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter5: Product And Service Costing: Job-order System

Section: Chapter Questions

Problem 27P: Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming...

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