Rrk Plasts sed e is able co bat 4 total d costs f 'welth Problem 11-36 fowed any uses a flexible overhead budget for its application-processing depart Gibralter Insurance C Standard Hou ment. The firm offers five types of policies, with the following standard hours allowed for clericst processing. Multiple Products: Insurance Company LO 11-1, 11-2, 11-4) Automobile Budgeted overhead cost r July $11 800 bble ov Renters 1 hout indirect Homeowner's 1 hour ndirect Health 2 hours Life Red ove 2 hours hours Super The following numbers of insurance applications were processed during July. Mlties Depre Automobile Tot Renter's Homeowner's 250 Health 200 Life.. 100 Required 400 L Pre 200 The controller estimates that the variable-overhead rate in the application-processing department is $4.00 per clerical hour, and that fixed-overhead costs will amount to $2,000 per month. Required: 1. How many standard clerical hours are allowed in July, given actual application activity? 2. Why would it not be sensible to base the company's flexible budget on the number of applications processed instead of the number of clerical hours allowed? 3. Construct a formula flexible overhead budget for the company. 4. What is the flexible budget for total overhead cost in July? 688 8