1. 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 400,000 units of the standard model and 110,000 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	$34,300 + $1.25 DLH
   Power	$0.50 DLH
   Indirect labor	$68,500 + $2.30 DLH
   Rent	$31,100

   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		fill in the blank bc7a50fb8063065_1DLH
   Variable costs:
   Maintenance	$fill in the blank bc7a50fb8063065_2	$fill in the blank bc7a50fb8063065_3
   Power	fill in the blank bc7a50fb8063065_4	fill in the blank bc7a50fb8063065_5
   Indirect labor	fill in the blank bc7a50fb8063065_6	fill in the blank bc7a50fb8063065_7
   Total variable costs			$fill in the blank bc7a50fb8063065_8
   Fixed costs:
   Maintenance		$fill in the blank bc7a50fb8063065_9
   Indirect labor		fill in the blank bc7a50fb8063065_10
   Rent		fill in the blank bc7a50fb8063065_11
   Total fixed costs			fill in the blank bc7a50fb8063065_12
   Total overhead costs			$fill in the blank bc7a50fb8063065_13

   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		fill in the blank e5b6b4044fcd040_1DLH
   Variable costs:
   Maintenance	$fill in the blank e5b6b4044fcd040_2	$fill in the blank e5b6b4044fcd040_3
   Power	fill in the blank e5b6b4044fcd040_4	fill in the blank e5b6b4044fcd040_5
   Indirect labor	fill in the blank e5b6b4044fcd040_6	fill in the blank e5b6b4044fcd040_7
   Total variable costs			$fill in the blank e5b6b4044fcd040_8
   Fixed costs:
   Maintenance		$fill in the blank e5b6b4044fcd040_9
   Indirect labor		fill in the blank e5b6b4044fcd040_10
   Rent		fill in the blank e5b6b4044fcd040_11
   Total fixed costs			fill in the blank e5b6b4044fcd040_12
   Total overhead costs			$fill in the blank e5b6b4044fcd040_13

   Prepare an overhead budget for production that is 20 percent lower than expected.

   Meliore, Inc. Overhead Budget For the Year Ended December 31

   	Per DLH
   Budgeted direct labor hours		fill in the blank 38ae4805504f074_1DLH
   Variable costs:
   Maintenance	$fill in the blank 38ae4805504f074_2	$fill in the blank 38ae4805504f074_3
   Power	fill in the blank 38ae4805504f074_4	fill in the blank 38ae4805504f074_5
   Indirect labor	fill in the blank 38ae4805504f074_6	fill in the blank 38ae4805504f074_7
   Total variable costs			$fill in the blank 38ae4805504f074_8
   Fixed costs:
   Maintenance		$fill in the blank 38ae4805504f074_9
   Indirect labor		fill in the blank 38ae4805504f074_10
   Rent		fill in the blank 38ae4805504f074_11
   Total fixed costs			fill in the blank 38ae4805504f074_12
   Total overhead costs			$fill in the blank 38ae4805504f074_13

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