WATERWAYS CONTINUING PROBLEM

Chapter $24$

$($This is a continuation of the Waterways Problem from Chapters $19$ through $23.)$

WCP$24$ Waterways Corporation is continuing its budget preparations. Waterways had the following

static budget and overhead costs for March.

Waterways Corporation Waterways Corporation

Manufacturing Overhead Budget $($Static$)$ Manufacturing Overhead Costs $($Actual$)$

For the Month of March For the Month of March

Budgeted production in units $117,500$ Production in units $118,500$

Budgeted costs Costs

Indirect materials $ $7,050$ Indirect materials $ $7,100$

Indirect labor $11,750$ Indirect labor $11,825$

Utilities $10,575$ Utilities $10,700$

Maintenance $5,875$ Maintenance $5,900$

Salaries $42,000$ Salaries $42,000$

Depreciation $16,800$ Depreciation $16,800$

Property taxes $2,500$ Property taxes $2,500$

Insurance $1,200$ Insurance $1,200$

Janitorial $1,300$ Janitorial $1,300$

Total budgeted costs $$99,050$ Total costs $$99,325$

Waterways produced $118,500$ units in March rather than the budgeted number of units.

Instructions

$($a$)$ Prepare a flexible overhead budget based on the following amounts produced.

$(1)115,500$ units

$(2)116,500$ units

$(3)117,500$ units

$(4)118,500$ units

$(5)119,500$ units

$($b$)$ Prepare a flexible budget report showing the differences $($favorable and unfavorable$)$ in

manufacturing overhead costs for the month of March.

$($c$)$ Prepare a responsibility report for the manufacturing overhead for March, assuming only variable

costs are controllable.