San Diego State University Operations And Supply Chain Management Assignment Help - Prouducts

Question - Company assembles all of its products in the Assembly Department. Budgeted cost for the
operation of this department for the year have been set as follows:
COMPANY
Budget costs for Assembly Department:
Variable costs:
Direct materials $900,000
Direct labor 675,000
Utilities 45,000
Indirect labor 67,500
Supplies 22,500
Total variable costs 1,710,000
Fixed costs:
Insurance 8,000
Supervisory Salaries 90,000
Depreciation 160,000
Equipment rental 42,000
Total fixed costs 300,000
Total budgeted costs $2,010,000
Budgeted direct labor-hours 75,000
Part 3: Actual activities and costs:
Actual direct labor-hours worked 73,000
Standard direct labor-hours allowed 70,000
Actual variable manufacturing overhead cost incurred $124 ...Read More ,100
Actual fixed manufacturing overhead cost incurred 301,600
Since the assembly work is done mostly by hand, operating activity in this department is best
measured by direct labor-hours. The cost formulas used to develop the budgeted costs above are
valid over a relevant range of 60,000 to 90,000 direct labor-hours per year.

Required:
1. Prepare a manufacturing overhead flexible budget for the Assembly Department using increments
of 15,000 direct labor-hours. (The company does not include direct materials and direct labor
costs in the flexible budget.) ...Read Less

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