Brick Co management currently uses a traditional method of allocating overhead costs such as electricity and natural gas, depreciation, admin, rent, repairs and maintenance and management/supervisor salaries, using a predetermined rate based on the number of units sold. Budgeted revenues and costs are based on prices and costs for 2020 and are as illustrated in Table 1.

Total Bricks (units) produced & sold 21,200,000 Revenues $ 33,600,000 Direct materials 5,104,000 Direct labour 9,780,000 Manufacturing overhead - Gas 4,310,000 Electricity 621,000 Rent 464,000 - Repairs and maintenance 352,000 Manager and supervisor salaries 168,000 - Depreciation 96,000 Admin 65,000Activity Total budgeted indirect costs 1. Crushing, grinding, screening & mixing $ 621,000 2. Setup 215,000 3. Forming 495,000 4. Drying 1,510,000 5. Firing 2,800,000 6. Packing, distribution & admin 435,000 Total $ 6,076,000 Table 2: Budgeted indirect costs for 2021