Chamberlin Company estimates that 360,000 direct labor hours will be worked during the

Problem 24-1A

Chamberlin Company estimates that 360,000 direct labor hours will be worked during the coming year, 2012, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.

Fixed Overhead Costs				Variable Overhead Costs
Supervision		$90,000		Indirect labor		$126,000
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
		$222,000				$360,000

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: Supervision $7,500, Depreciation $5,000, Insurance $2,470, Rent $2,000, and Property taxes $1,500.

Variable overhead costs: Indirect labor $10,360, Indirect materials, $6,400, Repairs $4,000, Utilities $5,700, and Lubricants $1,640.

 

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.

Prepare a flexible budget report for October.

 

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