Prepare an overhead budget for production that is 20 percent lower than expected. Engersol, Inc. Overhead Budget For the Year Ended December 31 Budgeted direct labor hours Variable costs: Per DLH 43,200 X Maintenance 1.25 $ 54,000 X Power 0.5 22,600 X Indirect labor 2.3 99,360 X Total variable costs 174,960 X Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs 34,600 68,200 31,700 134,500 309,460 Prepare an overhead budget for production that is 20 percent lower than expected. Engersol, Inc. Overhead Budget For the Year Ended December 31 Budgeted direct labor hours Variable costs: Per DLH 43,200 X Maintenance 1.25 $ 54,000 X Power 0.5 22,600 X Indirect labor 2.3 99,360 X Total variable costs 174,960 X Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs 34,600 68,200 31,700 134,500 309,460 Prepare an overhead budget for production that is 20 percent lower than expected. Engersol, Inc. Overhead Budget For the Year Ended December 31 Budgeted direct labor hours Variable costs: Per DLH 43,200 X Maintenance 1.25 $ 54,000 X Power 0.5 22,600 X Indirect labor 2.3 99,360 X Total variable costs 174,960 X Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs 34,600 68,200 31,700 134,500 309,460 Prepare an overhead budget for production that is 20 percent lower than expected. Engersol, Inc. Overhead Budget For the Year Ended December 31 Budgeted direct labor hours Variable costs: Per DLH 43,200 X Maintenance 1.25 $ 54,000 X Power 0.5 22,600 X Indirect labor 2.3 99,360 X Total variable costs 174,960 X Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs 34,600 68,200 31,700 134,500 309,460 Flexible Budget In an attempt to improve budgeting, the controller for Engersol, Inc., has developed a flexible budget for overhead costs. Engersol, Inc., makes two types of products, commercial floor cleaners and household floor cleaners. The company expects to produce 300,000 units of the commercial cleaner and 120,000 units of the household cleaner during the coming year. The commercial cleaner requires 0.10 direct labor hour per unit, and the household cleaner requires 0.16. The controller has developed the following cost formulas for each of the four overhead items: Cost Formula $34,600 + $1.25 DLH Maintenance Power $0.50 DLH Indirect labor $68,200+ $2.30 DLH Rent $31,700 Required: Required: 1. Prepare an overhead budget for the expected activity level for the coming year. Engersol, Inc. Overhead Budget For the Year Ended December 31 Per DLH Budgeted direct labor hours 62,000 X Variable costs: Maintenance 1.25 77,500 X Power 0.5 31,000 X Indirect labor 2.3 142,600 X Total variable costs Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs 313,100 X $ 34,600 68,200 31,700 134,500 447,600 X 2. Prepare an overhead budget that reflects production that is 10 percent higher than expected (for both products). Engersol, Inc. Overhead Budget For the Year Ended December 31 Budgeted direct labor hours Per DLH 59,400 X Variable costs: Maintenance 1.25 74,250 X Power 0.5 29,700 X Indirect labor 2.3 136,620 X Total variable costs 240,570 X Fixed costs: Maintenance Indirect labor Rent Total fixed costs Total overhead costs 34,600 68,200 31,700 134,500 $ 375,070 X