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Cody Co. developed its annual manufacturing overhead budget for its master budget for 2012 as follows: Expected annual operating capacity 120,000 Direct Labor Hours Variable overhead costs Indirect labor $360,000 Indirect materials 90,000 Factory supplies 60,000 Total variable 510,000 Fixed overhead costs Depreciation 180,000 Supervision 120,000 Property taxes 96,000 Total fixed 396,000 Total costs $906,000 The relevant range for monthly activity is expected to be between 8,000 and 12,000 direct labor hours.
Instructions Prepare a flexible budget for a monthly activity level of 8,000 and 9,000 direct labor hours. ?
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