Cerium Inc. produces a variety of household cleaning products. Cerium's controller has developed standard costs for the following four overhead items:

Overhead Item	Total Fixed Cost	Variable Rate per Direct Labor Hour
Maintenance	$ 113,000	$0.20
Power		0.68
Indirect labor	140,000	3.70
Rent	35,000

Next year, Cerium expects production to require 58,000 direct labor hours.

Required:

Question Content Area

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

Line Item Description	Rate per Hour	Activity Level 58,000 Hours
Variable costs:
Maintenance	$Maintenance	$Maintenance
Power	Power	Power
Indirect labor	Indirect labor	Indirect labor
Total variable cost	blank	$Total variable cost
blank	blank	blank
Fixed costs:	blank	blank
Maintenance	blank	$Maintenance
Indirect labor	blank	Indirect labor
Rent	blank	Rent
Total fixed costs	blank	$Total fixed costs
Total overhead costs	blank	$Total overhead costs

Question Content Area

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

Line Item Description	Rate per Hour	Activity Level fill in the blank 1 of 23 Hours	Activity Level fill in the blank 2 of 23 Hours
Variable costs:
Maintenance	fill in the blank 3 of 23$	fill in the blank 4 of 23$	fill in the blank 5 of 23$
Power	fill in the blank 6 of 23	fill in the blank 7 of 23	fill in the blank 8 of 23
Indirect labor	fill in the blank 9 of 23	fill in the blank 10 of 23	fill in the blank 11 of 23
Total variable costs		fill in the blank 12 of 23$	fill in the blank 13 of 23$
Fixed costs:
Maintenance		$ fill in the blank 14 of 23	$ fill in the blank 15 of 23
Indirect labor		fill in the blank 16 of 23	fill in the blank 17 of 23
Rent		fill in the blank 18 of 23	fill in the blank 19 of 23
Total fixed costs		fill in the blank 20 of 23$	fill in the blank 21 of 23$
Total overhead costs		fill in the blank 22 of 23$	fill in the blank 23 of 23$