Classics, Inc., uses a flexible budget for overhead costs. The company expects to produce 20,000 units of the product it manufactures. The cost formulas for each of the four overhead items is as follows:

a. Prepare flexible budget for overhead costs for the expected activity level for the coming year and then at 20% higher and 10% lower than expected. Include in the budget the unit costs for variable, fixed andtotal.

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Power Maintenance Indirect labor Rent Fixed Cost S 800 S 7,000 S 6,000 S 22,000 Variable Cost per unit S0.10 S0.75 $1.80