Drennon Company uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows:

Indirect Labor $8.50

Indirect Materials 2.50

Maintenance .90

Utilities .40

Fixed overhead costs per month are:

Supervision $700

Insurance 250

Property Taxes 300

Depreciation 950

The company believes it will normally operate in a range of 2,000 to 4,000 machine hours per month.

INSTRUCTIONS

Prepare a flexible manufacturing overhead budget for the expected range of activity, using increments of 1,000 machine hours.