Question

Bramble Inc.’s manufacturing overhead budget for the first quarter of 2020 contained the following data. Variable Costs Fixed Costs Indirect materials $11,300 Supervisory salaries $37,000 Indirect labor 10,800 Depreciation 6,000 Utilities 7,200 Property taxes and insurance 7,400 Maintenance 5,900 Maintenance 5,000 Actual variable costs were indirect materials $14,600, indirect labor $9,400, utilities $9,600, and maintenance $5,100. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,700. The actual activity level equaled the budgeted level. All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance. (a) Prepare a manufacturing overhead flexible budget report for the first quarter. (List variable costs before fixed costs.) BRAMBLE INC. Manufacturing Overhead Flexible Budget Report For the Quarter Ended March 31, 2020 Difference Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $ (b) Prepare a responsibility report for the first quarter. BRAMBLE INC. Manufacturing Overhead Responsibility Report For the Quarter Ended March 31, 2020 Difference Controllable Costs Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $

Answer 1

Answer and Explanation:

The preparation is presented below:

a. For manufacturing overhead flexible budget report is presented below:

Particulars Budget Actual Difference

Variable costs

Indirect Materials $11,300 $14,600 $3,300 U

Indirect labor $10,800 $9,400 $1,400 F

Utilities $7,200 $9,600 $2,400 U

Maintenance $5,900 $5,100 $800 F

Total variable costs $35,200 $38,700 $3,500 U

Fixed costs

Supervisory salaries $37,000 $37,000 0 N

Depreciation $6,000 $6,000 0 N

Prop.taxes & insurance $7,400 $8,700 $1,300 U

Maintenance $5,000 $5,000 0 N

total fixed costs $55,400 $56,700 $1,300 U

total costs $90,600 $95,400 $4,800 U

b. For Manufacturing overhead Responsibility Report

Particulars Budget Actual Difference

Controllable costs

Indirect materials $11,300 $14,600 $3,300 U

indirect labor $10,800 $9,400 $1,400 F

Utilities $7,200 $9,600 $2,400 U

Maintenance $10,900 $10,100 $800 F

Supervisory salaries $37,000 $37,000 0 N

total costs $77,200 $80,700 $3,500 U

The unfavorable variance is that variance in which the actual cost is greater than the budgeted variance and the favorable variance is that variance in which the actual cost is less than the budgeted variance