The manufacturing overhead budget for Fleming Company contains the following items.
|
Variable costs
|
|
Fixed costs
|
|
|
Indirect materials
|
$22,000
|
Supervision
|
$17,000
|
|
Indirect labor
|
12,000
|
Inspection costs
|
1,000
|
|
Maintenance expense
|
10,000
|
Insurance expense
|
2,000
|
|
Manufacturing supplies
|
6,000
|
Depreciation
|
15,000
|
|
Total variable
|
$50,000
|
Total fixed
|
$35,000
|
The budget was based on an estimated 2,000 units being produced. During the past month, 1,500 units were produced, and the following costs incurred.
|
Variable costs
|
|
Fixed costs
|
|
|
Indirect materials
|
$22,500
|
Supervision
|
$18,400
|
|
Indirect labor
|
13,500
|
Inspection costs
|
1,200
|
|
Maintenance expense
|
8,200
|
Insurance expense
|
2,200
|
|
Manufacturing supplies
|
5,000
|
Depreciation
|
14,700
|
|
Total variable
|
$49,200
|
Total fixed
|
$36,500
|
Instructions
(a) Determine which items would be controllable by Fred Bedner, the production manager.
(b) How much should have been spent during the month for the manufacture of the 1,500 units?
(c) Prepare a flexible manufacturing overhead budget report for Mr. Bedner.
(d) Prepare a responsibility report. Include only the costs that would have been controllable by Mr. Bedner. Assume that the supervision cost above includes Mr. Bedner's salary of $10,000, both at budget and actual. In an attached memo, describe clearly for Mr. Bedner the areas in which his performance needs to be improved.