Flexible Budget for Various Levels of Activity Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items: Variable Rate per Direct Overhead Item Total Fixed Cost Maintenance $86,000 Power Indirect labor Rent 140,000 35,000 Labor Hour $0.20 0.45 2.10 Next year, Palladium expects production to require 90,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Palladium Inc. Overhead Budget For the Coming Year Variable costs: Maintenance Power Indirect labor Total variable cost Activity Level Rate per Hour 90,000 Hours Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs 2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected. Activity Level Rate per Hour Hours Variable costs: Maintenance Power Indirect labor Total variable costs Fixed costs: Maintenance Indirect labor Hours Previous No Total fixed costs Total overhead costs 2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected. Activity Level Rate per Hour Hours Variable costs: Maintenance Power Indirect labor Total variable costs Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs Hours