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 1.50
Utilities .30
Fixed overhead costs per month are:
Supervision $800
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, 2010, the company incurs the following manufacturing overhead costs:
Indirect labor $14,000
Indirect materials 8,100
Maintenance 4,400
Utilities 950
Supervision 720
Insurance 200
Property taxes 300
Depreciation 930
Instructions
Prepare a flexible budget report, assuming that the company used 3,000 machine hours during August.