Shillong Lighting uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. 

Indirect labor..............................£1.00

Indirect materials.......................0.70

Utilities........................................0.40

Fixed overhead costs per month are supervision £4,000, depreciation £1,200, and property taxes £800. The company believes it will normally operate in a range of 7,000–10,000 direct labor hours per month.

Instructions

Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,000 direct labor hours.