Exercise 8.27 Flexible Budget In an attempt to improve budgeting, the controller for Meliore, Inc., has developed a flexible budget for overhead costs. Meliore, Inc., makes two types of products, the standard model and the deluxe model. Meliore expects to produce 300,000 units of the standard model and 120,000 units of the deluxe model during the coming year. The standard model requires 0.05 direct labor hour per unit, and the deluxe model requires 0.08 hours per unit. The controller has developed the following cost formulas for each of the four overhead items: Cost Formula Maintenance S34,500 S1.25 DLH $0.50 DLH Power Indirect labor S68A00 S2.30 DLH $31,500 Rent Required