Lindon Company”s flexible budget for variable manufacturing overhead is given below:

Cost

Formula

6,000

8,000

10,000

Overhead costs

per DLH

DLHs

DLHs

DLHs

Supplies

$0.20

$1,200

$1,600

$2,000

Indirect labor

0.50

3,000

4,000

5,000

Utilities

0.05

300

400

500

Total overhead cost

$0.75

$4,500

$6,000

$7,500

During a recent period, the company produced 2,500 units of product using 7,600 direct labor hours (DLHs). The standard allows 3 direct labor hours per unit. Actual variable overhead costs incurred were:

Supplies

$1,900

Indirect labor

3,040

Utilities

570

Total overhead cost

$5,510

The company had originally budgeted to produce 2,600 units during the period using 7,800 direct labor hours.

Required:

Prepare a performance report for the period showing only the spending variances for each overhead cost category.

120. The following overhead data are for a department in a large company.

Actual Costs

Static

Incurred

Budget

Activity level (in units)

400

380

Variable costs:

Indirect materials

$9,050

$8,132

Power

$2,540

$2,394

Fixed costs:

Administration

$5,080

$5,100

Rent

$8,590

$8,600

Required:

Prepare a report that would be useful in assessing how well costs were controlled in this department.