Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2017 contained the following data.

Variable Costs Fixed Costs

Indirect materials $11,100 Supervisory salaries $36,700
Indirect labor 11,000 Depreciation 6,100
Utilities 7,700 Property taxes and insurance 7,400
Maintenance 5,500 Maintenance 4,900

Actual variable costs were indirect materials $14,900, indirect labor $9,600, utilities $9,100, and maintenance $4,800. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,500. The actual activity level equaled the budgeted level.

Required:
a. Prepare a manufacturing overhead flexible budget report for the first quarter.
b. Prepare a responsibility report for the first quarter.

Explanation:

a. Manufacturing overhead Flexible budget report

                                Budget      Actual      Favorable (Unfavorable)

Variable cost          

Indirect material      $11,100      $14,900     $3,800  U

Indirect labor           $11,000     $9,600      $1,400   F

Utilities                     $7,700      $9,100       $1,400   U

Maintenance            $5,500     $4,800      $700     F

Total Variable cost  $35,300    $38,400    $3,100  U

Fixed expenses

Supervisory Salary    $36,700   $36,700     0

Depreciation              $6,100       $6,100      0

Property, taxes          $7,400       $8,500    $1,100    U

Maintenance              $4,900      $4,900     0            U

Total fixed expense  $55,100     $56,200  $1,100    U

Total controllable

cost                             $90,400    $94,600   $4,200 U

b.          Manufacturing overhead Responsibility report

Controllable cost     Budget      Actual      Favorable (Unfavorable)

Indirect material      $11,100      $14,900     $3,800  U

Indirect labor           $11,000     $9,600      $1,400   F

Utilities                     $7,700      $9,100       $1,400   U

Maintenance            $10,400    $9,700      $700      F

Supervisory salaries$36,700   $36,700     0

Total                          $76,900   $80,000    $3,100  U

answer; (c) communism and socialism;