Q$.1$ Caterpillar Company uses a flexible budget for manufacturing overhead based on

direct labor hours. Variable manufacturing overhead costs per direct labor hour are as

follows.

Fixed overhead costs per month are: Supervision $$4,000,$ Depreciation $$3,000,$ and

Property Taxes $$800.$ The company believes it will normally operate in a range of $7,000$

$10,000$ direct labor hours per month.

$$ Required $>$

Prepare a monthly flexible manufacturing overhead budget for $2025$ for the expected

range of activity, using increments of $1,000$ direct labor hours.

Assume that in May $2025,$ Caterpillar Company incurs the following manufacturing

overhead costs.

Prepare a flexible budget performance report, assuming that the company worked

$9,000$ direct labor hours during the month.