Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.
|
Indirect labor |
$1.00 |
|
Indirect materials |
0.50 |
|
Utilities |
0.40 |
Fixed overhead costs per month are: Supervision $4,000, Depreciation $1,500, and Property Taxes $800.The company believes it will normally operate in a range of 7,000–10,000 direct labor hours per month.
Instructions
Prepare a monthly manufacturing overhead flexible budget for 2010 for the expected range of activity, using increments of 1,000 direct labor hours.