Data concerning manufacturing overhead for Analina Industries are presented below. The Mixing Department is a cost center. An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and that 50% of supervisory costs are controllable at the department level.The flexible budget formula and the cost and activity for the months of June and July are as follows:

                                              Flexible Budget Per

                                               Direct Labor Hour               Actual Costs and Activity

                                                                                            June                 July

Direct labor hours                                                                6,000                7,000
Overhead Costs
Variable
Indirect Materials                          $3.50                                $20,500          $25,100
Indirect Labor                              6.00                                   39,500             40,700
Factory Supplies                            1.00                                  7,600               8,200
Fixed
Deprechiation                                $20,000                            15,000             15,000
Supervision                                     25,000                             24,000             26,000
Property Taxes                                 10,000                            12,000            12,000
Total Costs                                                                              118,600          127,000

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