Mighty Muffler Manufacturing, Inc. developed its annual manufacturing overhead budget for its master budget covering 2023 as follows:

Expected annual operating capacity 100,000 Direct Labor Hours

Variable overhead costs

Indirect labor $840,000

Indirect materials 72,000

Factory supplies 48,000

Total variable 960,000

Fixed overhead costs

Depreciation 90,000

Supervision 102,000

Property taxes 16,000

Total fixed 208,000

Total costs $1,168,000

The relevant range for monthly activity is expected to be between 9,000 and 10,000 direct labor hours.

Instructions

Prepare a flexible budget for a monthly activity level of 9,000 and 10,000 direct labor hours.