Flexible Budget Application The polishing department of Taylor Manufacturing Company operated during April 2019 with the following manufacturing overhead cost budget based on 4,000 hours of monthly productive capacity: TAYLOR MANUFACTURING COMPANY Polishing Department Overhead Budget (4,000 Hours) for the Month of April 2019 Variable costs: Factory supplies $ 100,000 Indirect labor 152,000 Utilities (usage charge) 68,000 Patent royalties on secret process 296,000 Total variable overhead $ 616,000 $ Supervisory salaries Depreciation on factory equipment Factory taxes Factory insurance Utilities (base charge) Total fixed overhead Total manufacturing overhead 160,000 144,000 48,000 32,000 80,000 $ 464,000 $ 1,080,000 The polishing department was operated for 4,600 hours during April and incurred the following manufacturing overhead costs: $ Factory supplies Indirect labor Utilities (usage factor) Utilities (base factor) Patent royalties Supervisory salaries Depreciation on factory equipment Factory taxes Factory insurance 97,520 136,160 82,800 96,000 280,416 168,000 144,000 56,000 32,000
Depreciation on factory equipment Factory taxes Factory insurance Total manufacturing overhead incurred 144,000 56,000 32,000 $ 1,092,896 Required Using a flexible budgeting approach, prepare a performance report for the polishing department for April 2019, comparing actual overhead costs with budgeted overhead costs for 4,600 hours. Separate overhead costs into variable and fixed components and show the amounts of any variances between actual and budgeted amounts. Taylor Manufacturing Company Polishing Department Performance Report - Manufacturing Overhead For the Month Ended April 30, 2019 Budget Actual Costs (4,600 hours) Variances Variable costs: Total variable overhead Fixed costs: Total fixed overhead Total overhead costs