Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2022 contained the following data.

Actual variable costs were indirect materials $13,500, indirect labor $9,500, utilities $8,700, and maintenance $5,000. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,300. The actual activity level equaled the budgeted level. All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

Instructions

a. Prepare a manufacturing overhead flexible budget report for the first quarter.

b. Prepare a responsibility report for the first quarter.

Prepare and discuss a responsibility report.

Transcribed Image Text:

Variable Costs Fixed Costs Supervisory salaries Indirect $12,000 $36,000 materials Indirect 10,000 Depreciation 7,000 labor Property taxes and insurance Utilities 8,000 8,000 Maintenance 6,000 Maintenance 5,000