Exercise 7-7 Manufacturing: Direct labor and factory overhead budgets LO P1 Addison Co. budgets production of 2,450 units during the second quarter. Other information is as follows: Direct labor Variable overhead Fixed overhead Each finished unit requires 5 direct labor hours, at a cost of $18 per hour. Applied at the rate of $12 per direct labor hour. Budgeted at $see,0e0 per quarter. 1. Prepare a direct labor budget. 2. Prepare a factory overhead budget