Alcore Company estimates that 240,000 direct labour hours will be worked in the assembly department during 2022.
Question:
Alcore Company estimates that 240,000 direct labour hours will be worked in the assembly department during 2022. Based on that, the following budgeted manufacturing overhead data are calculated:
It is estimated that the direct labour hours worked each month will range from 18,000 to 24,000 hours. During January, 20,000 direct labour hours were worked and the following overhead costs were incurred:
Instructions
a. Prepare a monthly flexible manufacturing overhead budget for each increment of 2,000 direct labour hours (DLH) over the relevant range for the year ended December 31, 2022.
b. Prepare a manufacturing overhead budget report for January.
c. Comment on management’s efficiency in controlling the manufacturing overhead costs in January.
Step by Step Answer:
Managerial Accounting Tools For Business Decision Making
ISBN: 9781119731825
6th Canadian Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Ibrahim M. Aly, Donald E. Kieso