Variable costs : Indirect materials $ 4,182 $ 4,148 Electricity $ 2,536 $ 2,414
Fixed costs : Administration $ 6,540 $ 6,500 Rent $ 6,310 $ 6,400 Required : Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department . ( Points : 25 )
Question 6.6 . ( TCO H ) McMullen Co . uses 10,000 units of Part X each year as a component in the assembly of one of its products . The company is presently producing Part X internally at a total cost of $ 125,000 as follows . Direct materials $ 40,000 Direct labor 30,000 Variable manufacturing overhead 25,000 Fixed manufacturing overhead 30,000 Total costs $ 125,000 An outside supplier has offered to provide Part X at a price of $ 10 per unit . If McMullen stops producing the part internally , one third of the fixed manufacturing overhead would be eliminated . Required : Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting the outside supplier ' s offer . Please state clearly whether the part should be made or bought and share your work . ( Points : 30 ) Question 7.7 . ( TCO B ) Buckhorn Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year . Data for the upcoming year appear below . Estimated machine hours 37,000 Estimated variable manufacturing overhead $ 7.77 per machine hour Estimated total fixed manufacturing overhead $ 888,000
The actual machine hours for the year turned out to be 35,000 .
Required : Compute the company ' s predetermined overhead rate . ( Points : 25 )