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Swan Company

Prepare a Flexible Budget [LO1]
The cost formulas for Swan Company's manufacturing overhead costs are given below. The costs cover a range of 8,000 to 10,000 machine-hours.

Overhead Costs Cost Formula
Supplies $0.20 per machine-hour
Indirect labor $10,000 plus $0.25 per machine-hour
Utilities $0.15 per machine-hour
Maintenance $7,000 plus $0.10 per machine-hour
Depreciation $8,000
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Required:
Prepare a flexible budget in increments of 1,000 machine-hours. Include all costs in your flexible budget. (Round your answers to 2 decimal places for Cost Formula per MH. Omit the "$" sign in your response.)

Swan Company
Flexible Budget
Cost
Formula Machine-Hours
Overhead Costs per MH 8,000 9,000 10,000
Variable:
Supplies $
$
$
$

Indirect labor

Utilities

Maintenance

Total variable overhead cost $

Fixed:
Indirect labor

Maintenance

Depreciation

Total fixed overhead cost

Total overhead cost $
$
$

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Hint 1

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Solution Preview

Prepare a Flexible Budget [LO1]
The cost formulas for Swan Company's manufacturing overhead costs are given below. The costs cover a range of 8,000 to 10,000 machine-hours.

Overhead Costs Cost Formula
Supplies $0.20 per machine-hour
Indirect labor $10,000 plus $0.25 per machine-hour
Utilities $0.15 per ...

Solution Summary

This solution is comprised of a detailed explanation to prepare a flexible budget in increments of 1,000 machine-hours. Include all costs in your flexible budget.

$2.19