Consider the following information from Grantham Company,then see the instructions that
follow.
Grantham Company manufactures dog whistles. The followinginformation is available from
the budgetary control system for 2016, and was used to createthe master budget. Grantham
applies overhead using an activity index of direct laborhours.
Variable Costs
Rate per direct labor hour
Indirect labor
$0.52
Indirect materials
0.36
Factory utilities
0.88
Factory repairs
0.48
Fixed Costs
Amount per year
Depreciation
$25,300
Insurance
9,300
Property taxes
5,800
Supervision
61,500
The master overhead budget was prepared with the expectationthat 462,000 direct labor
hours would be worked during the year. In August, 39,500 directlabor hours were worked.
At that level of activity, actual costs were as shown below:
Variable Costs
Indirect labor
$0.54
per labor hour
Indirect materials
0.34
per labor hour
Factory utilities
0.91
per labor hour
Factory repairs
0.53
per labor hour
Fixed Costs
Depreciation
$2,108
Insurance
825
Property taxes
500
Supervision
5,250
Instructions:
Prepare a monthly manufacturing overhead flexible budget,assuming production levels
ranging from 30,000 to 45,000 direct labor hours, in incrementsof 5,000.
Prepare a budget report for August comparing actual results tothe flexible budget. Explain
whether costs were successfully controlled and how you cantell.
THIS ASSIGNMENT MUST BE COMPLETED IN EXCEL. You should developan efficient and
customizable production cost report, using formulas wheneverpossible instead of keyed in
values. No numeric values except the ones shown above shouldneed to be keyed in.
Consider the following information from Grantham Company,then see the instructions that | ||||||||
follow. | ||||||||
Grantham Company manufactures dog whistles. The followinginformation is available from | ||||||||
the budgetary control system for 2016, and was used to createthe master budget. Grantham | ||||||||
applies overhead using an activity index of direct laborhours. | ||||||||
Variable Costs | Rate per direct labor hour | |||||||
Indirect labor | $0.52 | |||||||
Indirect materials | 0.36 | |||||||
Factory utilities | 0.88 | |||||||
Factory repairs | 0.48 | |||||||
Fixed Costs | Amount per year | |||||||
Depreciation | $25,300 | |||||||
Insurance | 9,300 | |||||||
Property taxes | 5,800 | |||||||
Supervision | 61,500 | |||||||
The master overhead budget was prepared with the expectationthat 462,000 direct labor | ||||||||
hours would be worked during the year. In August, 39,500 directlabor hours were worked. | ||||||||
At that level of activity, actual costs were as shown below: | ||||||||
Variable Costs | ||||||||
Indirect labor | $0.54 | per labor hour | ||||||
Indirect materials | 0.34 | per labor hour | ||||||
Factory utilities | 0.91 | per labor hour | ||||||
Factory repairs | 0.53 | per labor hour | ||||||
Fixed Costs | ||||||||
Depreciation | $2,108 | |||||||
Insurance | 825 | |||||||
Property taxes | 500 | |||||||
Supervision | 5,250 | |||||||
Instructions: | ||||||||
Prepare a monthly manufacturing overhead flexible budget,assuming production levels | ||||||||
ranging from 30,000 to 45,000 direct labor hours, in incrementsof 5,000. | ||||||||
Prepare a budget report for August comparing actual results tothe flexible budget. Explain | ||||||||
whether costs were successfully controlled and how you cantell. | ||||||||
THIS ASSIGNMENT MUST BE COMPLETED IN EXCEL. You should developan efficient and | ||||||||
customizable production cost report, using formulas wheneverpossible instead of keyed in | ||||||||
values. No numeric values except the ones shown above shouldneed to be keyed in. |