Data concerning manufacturing overhead for Analina Industries are presented below. The Mixing Department is a cost center. An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and that 50% of supervisory costs are controllable at the department level.The flexible budget formula and the cost and activity for the months of June and July are as follows:
Flexible Budget Per
Direct Labor Hour Actual Costs and Activity
June July
Direct labor hours 6,000 7,000
Overhead Costs
Variable
Indirect Materials $3.50 $20,500 $25,100
Indirect Labor 6.00 39,500 40,700
Factory Supplies 1.00 7,600 8,200
Fixed
Deprechiation $20,000 15,000 15,000
Supervision 25,000 24,000 26,000
Property Taxes 10,000 12,000 12,000
Total Costs 118,600 127,000
Instructions
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(a)
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Prepare the responsibility reports for the Mixing Department for each month.
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(b)
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Comment on the manager's performance in controlling costs during the two-month period.
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