Bond Company uses the following figures to prepare its annual manufacturing overhead budget for 2014:

Variable overhead costs

-Indirect labor ($3.50 per direct labor hour)

-Indirect materials ($0.75 per direct labor hour)

-Factory supplies ($0.25 per direct labor hour)

Fixed overhead costs (for the relevant range)

-Depreciation per month 30,000

-Supervision per month 20,000

-Property taxes per month 10,000

Total fixed overhead costs per month 60,000

The relevant range for monthly activity is expected to be between 16,000 and 24,000 direct labor hours.

1. Prepare a flexible budget for the monthly activity levels of 16,000 and 18,000 direct labor hours.