### Prepare a flexiable budget performance report

##### Reference no: EM13154218

E21-3 Thome company uses a flexiable budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hours are as follow:

Indirect labor \$1.50; Indirect materials .50; Utilities .40

Fixed overhead costs per month are : Supervision \$4000, Depreciation \$1,500 and Property taxes \$800. The company believes it will normally operate in a range of 7,000-10,000 direct labor hours per month.

1. Using the information in E21-3, assume that in July 2012, Thome Company incurs the following manufacturing overhead costs.

Variable costs: Indirect labor: \$8,700; Indirect Materials: \$4,300; Utilities: \$3,200

Fixed costs: Supervision: \$4,000; Depreciation: \$1,500 Property Taxes: \$800

(a) Prepare a flexiable budget performance report, assuming that the company worked 9,000 direct labor hours during the month.

(b) Prepare a flexiable budget performance report, assuimng that the company worked 8,500 direct labor hours during the month.

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