Carmichael Industries is in the process of analyzing its manufacturing overhead costs. Carmichael Industries is not sure if the number of units produced or the number of direct labor (DL) hours is the best cost driver to be used for predicting manufacturing overhead (MOH) costs. The following information is available:

Here is the list of tasks that you need to do in this assessment:

1. Are manufacturing overhead costs fixed, variable, or mixed? Explain.

2. Graph Carmichael Industries