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.

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