The cost formulas for Swan Company’s manufacturing overhead costs are given below. The costs cover a...

Question

The cost formulas for Swan Company’s manufacturing overhead costs are given below. The costs cover a range of 8,000 to 10,000 machine-hours.
Overhead Costs Cost Formula
Supplies . . . . . . . . . . . . . . $0.20 per machine-hour
Indirect labor . . . . . . . . . . $10,000 plus $0.25 per machine-hour
Utilities . . . . . . . . . . . . . . . $0.15 per machine-hour
Maintenance . . . . . . . . . . $7,000 plus $0.10 per machine-hour
Depreciation . . . . . . . . . . $8,000

Required:
Prepare a flexible budget in increments of 1,000 machine-hours. Include all costs in your flexible budget.

David · Accepted Answer

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Prepare a Flexible Budget [LO1]
The cost formulas for Swan Company's manufacturing overhead costs are given below. The costs cover a range of 8,000 to 10,000 machine-hours.
Overhead Costs
Cost Formula
Supplies
$0.20 per machine-hour
Indirect labor
$10,000 plus $0.25 per machine-hour
Utilities
$0.15 per machine-hour
Maintenance
$7,000 plus $0.10 per machine-hour
Depreciation
$8,000
Required:
Prepare a flexible budget in increments of 1,000 machine-hours. Include all costs in your flexible budget. (Round your answers to 2 decimal places for Cost Formula per MH. Omit the "$" sign in your response.)
Swan Company
Flexible Budget
 
Cost
Formula
Machine-Hours
Overhead Costs
per MH
8,000
9,000
10,000
Variable:
 
 
 
 
 
 
 
 
Supplies
$
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2
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0.20
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1
 
$
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2
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1600
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1
 
$
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2
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1800
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1
 
$
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2
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2000
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1
 
Indirect labor
 
list
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2
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0.25
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1
 
 
list
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2
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2000
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1
 
 
list
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2
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2250
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1
 
 
list
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2
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2500
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1
 
Utilities
 
list
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2
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0.15
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1
 
 
list
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2
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1200
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1
 
 
list
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2
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1350
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1
 
 
list
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2
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1500
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1
 
Maintenance
 
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2
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0.10
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The cost formulas for Swan Company’s manufacturing overhead costs are given below. The costs cover a range of 8,000 to 10,000 machine-hours. Overhead Costs Cost Formula Supplies . . . . . . . . . . ....

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