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Fixed overhead costs per month are supervision $4,000,
depreciation $1,200, and property taxes $800. The company
believes it will normally operate in a range of 7,000–10,000
direct labor hours per month.
Instructions
Prepare a monthly manufacturing overhead flexible budget for
2017 for the expected range of activity, using increments of
1,000 direct labor hours.
Prepare flexible budget reports for manufacturing overhead
costs, and comment on findings.
E10-5
Fallon Company uses flexible budgets to control its selling
expenses. Monthly sales are expected to range from $170,000 to
$200,000. Variable costs and their percentage relationship to
sales are sales commissions 6%, advertising 4%, traveling 3%,
and delivery 2%. Fixed selling expenses will consist of sales
salaries $35,000, depreciation on delivery equipment $7,000,
and insurance on delivery equipment $1,000.
Instructions
Prepare a monthly flexible budget for each $10,000 increment
of sales within the relevant range for the year ending December
31, 2017.
Prepare flexible budget reports for selling expenses.
E10-17
The South Division of Wiig Company reported the following
data for the current year.