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Flexible Overhead Budget, Report and Responsibilty Report

Hay's Corporation is continuing its budget preparations. Hay's had the following static budget and overhead costs for March.

Hay's Corporation Hay's Corporation
Manufacturing Overhead Budget (Static) Manufacturing Overhead Costs (Actual)
For the Month of March For the Month of March
Budgeted production in units 117,500 Production in units 118,500
Budgeted costs Costs
Indirect materials $ 7,050 Indirect materials $ 7,100
Indirect labor 11,750 Indirect labor 11,825
Utilities 10,575 Utilities 10,700
Maintenance 5,875 Maintenance 5,900
Salaries 42,000 Salaries 42,000
Depreciation 16,800 Depreciation 16,800
Property taxes 2,500 Property taxes 2,500
Insurance 1,200 Insurance 1,200
Janitorial 1,300 Janitorial 1,300

Total budgeted costs $99,050 Total costs $99,325

Hay's produced 118,500 units in March rather than the budgeted number of units.

Instructions
(a) Prepare a flexible overhead budget based on the following amounts produced.

(1) 115,500 units
(2) 116,500 units
(3) 117,500 units
(4) 118,500 units
(5) 119,500 units

(b) Prepare a flexible budget report showing the differences (favorable and unfavorable) in manufacturing overhead costs for the month of March.

(c) Prepare a responsibility report for the manufacturing overhead for March, assuming only variable costs are controllable.

Can you please give me a detail on how it is calculated step by step?

Solution Summary

This solution provides assistance with a flexible overhead budget, a report, and a responsibility report.

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