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ch 21 -3 quiz - Raney Company uses a flexible budget for...

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Unformatted text preview: Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follow: Indirect labor $1.12 Indirect materials 0.52 Utilities 0.41 Fixed overhead costs per month are: Supervision $4,300, Depreciation $1,700. and Property Taxes $850. The company believes it will normally operate in a range of 600010.700 direct labor hours per month. Complete the monthly flexible manufacturing overhead budget for 2010 for the expected range of activity, using increments of 1,300 direct labor hours. RANEY COMPANY Monthly Flexible Manufacturing Overhead Budget For the Year 2010 Activity level Direct labor hours 6800 0100 9400 10700 Variable costs Indirect labor $7616 5 9072 $ 10520 $ 11904 Indirect materials 3536 4212 4808 5564 Utilities 2700 3321 3054 4307 Total variable costs 13940 16605 19270 21935 Fixed costs Supervision 4300 4300 4300 4300 Depreciation 1700 1700 1700 1700 Property taxes 850 850 850 850 Total fixed costs 6850 6850 6850 6850 Total costs $ 20790 $ 23455 $ 26120 $ 20205 ...
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