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Accounting Help…

An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and the 50% of the supervisory costs are controllable at the department level. The flexible budget formula and the cost and activity for the months of July and August are as follows: Flexible Budget Per Direct Labor Hour Actual Costs Actual Costs July August Direct labor hours 6,000 7,000 Overhead costs Variable Indirect materials $3.50 $20,500 $25,100 Indirect labor 6.00 39,500 40,700 Factory supplies 1.00 9,600 8,200 Fixed Depreciation $20,000 15,000 15,000 Supervision 20,000 18,000 20,900 Property taxes 5,000 12,000 12,000 Total costs $114,500 $121,900 Instructions: (a) Prepare the responsibility reports for the Mixing Department for each month. (b) Comment on the manager’s performance in controlling costs during the two month period.

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