Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items:

Overhead	Total Fixed Cost	Variable Rate per
Item		Direct Labor Hour
Maintenance	$86,600	$0.15
Power		0.55
Indirect labor	140,500	2.20
Rent	35,400

Next year, Palladium expects production to require 110,000 direct labor hours.

	Required:
1.	Prepare an overhead budget for the expected level of direct labor hours for the coming year.
2.	Prepare an overhead budget that reflects production that is 18% higher than expected, and for production that is 18% lower than expected.

X

Amount Descriptions

Refer to the list below for the exact wording of an amount description within your budgets.

Amount Descriptions
Direct labor
Indirect labor
Maintenance
Power
Rent
Total fixed costs
Total flexible budget variance
Total overhead costs
Total variable costs

X

Overhead Budget

1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. (Note: Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

Palladium Inc.

Overhead Budget

For the Coming Year

1		Formula	Activity Level: 110,000 Hours
2	Variable costs:
3
4
5
6
7	Fixed costs:
8
9
10
11
12

X

Overhead Budget - Production Changes

2. Prepare an overhead budget that reflects production that is 18% higher than expected, and for production that is 18% lower than expected. (Note: Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

Palladium Inc.

Overhead Budget

For the Coming Year

1		Formula	Activity Level: 18% higher	Activity Level: 18% lower
2	Variable costs:
3
4
5
6
7	Fixed costs:
8
9
10
11
12