Flexible Budget for Various Levels of Activity

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

Variable Rate per Direct

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

Required:

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

Cerium Inc.

Overhead Budget.

For the Coming Year

Fixed costs:

Maintenance

Indirect labor

Rent

Total fixed costs

Total overhead costs

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