Bond Company developed its annual manufacturing overhead budget for its master budget for 2014 as follows:

Expected annual operating capacity

240,000 Direct Labor Hours

Variable overhead costs

	Indirect labor	$840,000
	Indirect materials	180,000
	Factory supplies	60,000

Total variable

1,080,000

Fixed overhead costs

	Depreciation	360,000
	Supervision	240,000
	Property taxes	120,000

Total fixed

720,000

Total costs

$1,800,000

The relevant range for monthly activity is expected to be between 16,000 and 24,000 direct labor hours. Instructions Prepare a flexible budget for a monthly activity level of 16,000 direct labor hours.