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

Fixed overhead costs per month are: Supervision $4,000, Depreciation $1,500, 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 2012 for the expected range of activity, using increments of 1,000 direct labor hours.

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Indirect labor $1.00 Indirect materials 0.50 Utilities 0.40