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Palladium inc. produces a variety of household cleaning products.Palladiums controller has developed standard costs for the following four overhead items:

Overhead Item total fixed cost Variable rate per direct labor hour

maintenance $86,000 $.20

Power .45

indirect labor 140,000 2.10

rent 35,000

Next year, Palladium expects production to require 88,000 direct labor hours

1. Prepare an overhead budget for the expected level of direct labor hours for the upcoming year.

2. Prepare ann overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.