1. Montgomery Company has developed the following flexible budget formulas for its four overhead items:

   Overhead item	Fixed Cost	Variable rate per direct labor hour
   Maintenance	$10,000	$ 3.00
   Power	$ 1,500	$ 0.30
   Indirect labor cost		$12.00
   Equipment lease	$ 7,000
   Total	$18,500	$15.30

   Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however this year 19,000 units were produced with the following actual costs:

   Overhead item	Actual costs
   Maintenance	$14,000
   Power	$ 2,200
   Indirect labor cost	$70,000
   Equipment lease	$ 7,000
   Total costs	$93,200

   Calculate the after-the-fact budget for the actual level of activity.

   a.$77,400

   b.$118,600

   c.$115,000

   d.$91,600

   e.None of these choices are correct.