BYP10-6 The manufacturing overhead budget for Fleming Company contains the following items.

 

Variable costs	Â	Fixed costs	Â
Indirect materials	$22,000	Supervision	$17,000
Indirect labor	12,000	Inspection costs	1,000
Maintenance expense	10,000	Insurance expense	2,000
Manufacturing supplies	6,000	Depreciation	15,000
Total variable	$50,000	Total fixed	$35,000

                                                                         

 

The budget was based on an estimated 2,000 units being produced. During the past month, 1,500 units were produced, and the following costs  incurred.

 

Variable costs	Â	Fixed costs	Â
Indirect materials	$22,500	Supervision	$18,400
Indirect labor	13,500	Inspection costs	1,200
Maintenance expense	8,200	Insurance expense	2,200
Manufacturing supplies	5,000	Depreciation	14,700
Total variable	$49,200	Total fixed	$36,500

 

                                                                                                                                                                                

Instructions

(a)  Determine which items would be controllable by Fred Bedner, the production manager.

(b)  How much should have been spent during the month for the manufacture of the 1,500 units?

(c)   Prepare a flexible manufacturing overhead budget report for Mr. Bedner.

(d)  Prepare a responsibility report. Include only the costs that would have been controllable by Mr. Bedner. Assume that the supervision cost above includes Mr. Bedner’s salary of $10,000, both at budget and actual. In an attached memo, describe clearly for Mr. Bedner the areas in which his performance needs to be improved.