Speier Company estimates that 240,000 direct labor hours will be worked during 2014 in the Assembly Department. On this basis, the following budgeted manufacturing overhead data are computed.

It is estimated that direct labor hours worked each month will range from 18,000 to 24,000 hours.
During January, 20,000 direct labor 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 labor hours over the relevant range for the year ending December 31, 2014.
(b) Prepare a manufacturing overhead budget report for January.
(c) Comment on management€™s efficiency in controlling manufacturing overhead costs inJanuary.

Variable Overhead Costs Indirect labor Indirect materials Repairs Utilities Lubricants Fixed Overhead Costs $ 72,000 48,000 36,000 24,000 12,000 192,000 Supervision Depreciation Insurance Rent Property taxes 75,600 30,000 12,000 9,600 6,000 $133,200 Variable Overhead Costs Indirect labor Indirect materials Repairs Utilities Fixed Overhead Costs $6,200 3,600 2,300 1,700 1,050 $14,850 Supervision Depreciation Insurance Rent Property taxes 6,300 2,500 1,000 850 500 11,150