P21_Cook Company _Manfacturing Budgets

P21-1A - Prepare flexible budget and budget report for manufacturing overhead.
Cook Company estimates that			3,60,000	direct labor hours will be worked during the coming year,
2012, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data, shown below, are computed for the year.
									Fixed Overhead Costs	Variable Overhead Costs
	Supervision		$90,000		Indirect labor	$1,26,000
	Depreciation		60,000		Indirect materials	90,000
	Insurance		30,000		Repairs	54,000
	Rent		24,000		Utilities	72,000
	Property taxes		18,000		Lubricants	18,000
			$2,22,000			$3,60,000

It is estimated that direct labor hours worked each month will range from						27,000	to	36,000
hours.
During October,		27,000	direct labor hours were worked and the following overhead costs were
incurred.
	Fixed Overhead Costs				Variable Overhead Costs
	Supervision		$7,500		Indirect labor	$10,360
	Depreciation		5,000		Indirect materials	6,400
	Insurance		2,470		Repairs	4,000
	Rent		2,000		Utilities	5,700
	Property taxes		1,500		Lubricants	1,640

Instructions:
(a) Prepare a monthly manufacturing overhead flexible budget for each increment of						3,000	direct labor hours
over the relevant range for the year ending December 31, 2012.

(b) Prepare a flexible budget report for October.

P21_Cook Company _Manfacturing Budgets

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