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

Overhead Item	Total Fixed Cost	Variable Rate per Direct Labor Hour
Maintenance	$ 86,000	$0.20
Power		0.45
Indirect labor	140,000	2.10
Rent	35,000

Next year, Palladium expects production to require 90,000 direct labor hours.

Required:

1. Prepare an overhead budget for the expected level of direct labor hours for the coming year.

Palladium Inc. Overhead Budget For the Coming Year

Variable costs:	Rate per Hour	Activity Level 90,000 Hours
Maintenance
Power
Indirect labor
Total variable cost
Fixed costs:
Maintenance
Indirect labor
Rent
Total fixed costs
Total overhead costs

2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.

Activity Level
	Rate per Hour	fill in the blank 2854f5fb9fa1006_1 Hours	fill in the blank 2854f5fb9fa1006_2 Hours
Variable costs:
Maintenance
Power
Indirect labor
Total variable costs
Fixed costs:
Maintenance
Indirect labor
Rent
Total fixed costs
Total overhead costs