WCP24 Waterways Corporation is continuing its budget preparations. Waterways had the following static budget
and overhead costs for March 2014.
WATERWAYS CORPORATION WATERWAYS CORPORATION
Manufacturing Overhead Budget Manufacturing Overhead Costs (Actual)
(Static) For the Month of March 2014 For the Month of March 2014
Budgeted production in units 117,500 Production in units 118,500
Budgeted costs Costs
Indirect materials $ 5,875 Indirect materials $ 5,910
Indirect labor 14,100 Indirect labor 14,195
Utilities 11,750 Utilities 11,880
Maintenance 8,225 Maintenance 8,275
Salaries 42,000 Salaries 42,000
Depreciation 16,800 Depreciation 16,800
Property taxes 3,000 Property taxes 3,000
Insurance 1,200 Insurance 1,200
Janitorial 1,500 Janitorial 1,500
Total budgeted costs $104,450 Total costs $104,760
Waterways produced 118,500 units in March rather than the budgeted number of units.
Instructions
(a) Prepare a flexible overhead budget based on the following amounts produced.
(1) 115,500 units
(2) 116,500 units
(3) 117,500 units
(4) 118,500 units
(5) 119,500 units
(b) Prepare a flexible budget report showing the differences (favorable and unfavorable) in manufacturing
overhead costs for the month of March.
