Flexible Budget The controller for Muir Company's Salem plant is analyzing overhead in order to determine appropriate drivers for use in flexible budgeting. She decided to concentrate on the past 12 months since that time period was one in which there was little important change in technology, product lines, and so on. Data on overhead costs, number of machine hours, number of setups, and number of purchase orders are in the following table. Number Number of Overhead Machine of Purchase Month Costs Hours Setups Orders January $ 32,296 1,000 20 216 February 31,550 930 18 250 March 36,280 1,100 21 300 April 36,867 1,050 23 270 May 36,790 1,170 22 285 June 37,800 1,200 25 240 July 40,024 1,235 27 237 August 39,256 1,190 24 303 September 33,800 1,070 20 255 October 33,779 1,210 22 195 November 37,225 1,207 23 270 December 27,500 1,084 15 150 Totals $423,167 13,446 260 2,971 Required: 1. Calculate an overhead rate based on machine hours using the total overhead cost and total machine hours. (Round the overhead rate to the nearest cent and predicted overhead to the nearest dollar.) Use this rate to predict overhead for each of the 12 months. Overhead rate: : per machine hour Prepare a flexible budget for overhead for the 12 months. If there is no variance, enter "O" for the amount and select "NA" in the last column. Enter all amounts as postive values. Muir Company Flexible Budget for Overhead Month January February March April Predicted Overhead Actual Overhead Variance May June July August September October November December Totals 2. Run a regression equation using only machine hours as the independent variable. Prepare a flexible budget for overhead for the 12 months using the results of this regression equation. (Round the intercept and x- coefficient to the nearest cent and predicted overhead amount to the nearest dollar.) If there is no variance, enter "O" for the amount and select "NA" in the last column. Enter all your answers as positive amounts. Muir Company Flexible Budget for Overhead Month Predicted Overhead Actual Overhead Variance January February March April May June July August September October November December Totals Is this flexible budget better than the budget in Requirement 1