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 130,000 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. The controller has developed the following cost formulas for each of the four overhead items: Cost Formula Maintenance $34,600 + $1.25 DLH Power $0.50 DLH Indirect labor $68,200 + $2.30 DLH Rent $31,700 Required: Required: 1. Prepare an overhead budget for the expected activity level for the coming year. Meliore, Inc. Overhead Budget For the Year Ended December 31 Per DLH Budgeted direct labor hours 160,400 X DLH Variable costs: Maintenance 200,500 $ 0 X Power 0 X 80,200 Indirect labor 368,920 0 Total variable costs 649,620 X Fixed costs: Maintenance 34,600 Indirect labor 68,200 Rent 31,700 Total fixed costs 134,500 Total overhead costs 784,120 2. Prepare an overhead budget that reflects production that is 10 percent higher than expected (for both products). Meliore, Inc. Overhead Budget For the Year Ended December 31 Per DLH Budgeted direct labor hours 176,440 X DLH Variable costs: Maintenance 220,550 $ 0 Power 0 88,220 X Indirect labor 405,812 X 0 Total variable costs 714,582 X Fixed costs: Maintenance 34,600 Indirect labor 68,200 Rent 31,700 Total fixed costs 134,500 Total overhead costs 849,082 Meliore, Inc. Overhead Budget For the Year Ended December 31 Per DLH Budgeted direct labor hours 128,320 X DLH Variable costs: Maintenance $ 160,400 0 Power 0 X 64,160 X X X X Indirect labor 295,136 x 0 Total variable costs 519,696 X Fixed costs: Maintenance 34,600 Indirect labor 68,200 Rent 31,700 Total fixed costs 134,500 Total overhead costs 654,196 X Feedback