Question

Strickland Corp.'s manufacturing overhead budget for the first quarter of 2019 contained the following data: Variable Costs Indirect materials $40,000 Indirect labor 24,000 Utilities 20,000 Maintenance 12,000 Fixed Costs Supervisor's salary $80,000 Depreciation 16,000 Property taxes 8,000 Actual variable costs for the first quarter were: Indirect materials $37,200 Indirect labor 26,400 Utilities 21,000 Maintenance 10,600 Actual fixed costs were as expected except for property taxes which were $9,000. All costs are considered controllable by the department manager except for the supervisor's salary. Prepare a manufacturing overhead responsibility performance report for the first quarter.

Answer 1

Answer and Explanation:

The Preparation of manufacturing overhead responsibility performance report for the first quarter is shown below:-

                              Strickland Corp.'s

             Manufacturing overhead cost responsibility report

                   For the report Quarter ended

Controllable costs     Budget      Actual      Difference

Indirect material        $40,000    $37,200      $2,800 Favorable

Indirect labor             $24,000    $26,400     $2,400 Unfavorable

Utilities                       $20,000   $21,000     $1,000 Favorable

Maintenance              $12,000     $10,600     $1,,400 Favorable

Depreciation              $16,000     $16,000       -

Property taxes           $8,000       $9,000       $1,000 Unfavorable