Sound Productions uses a flexible budget for overhead based on studio hours. Variable overhead costs per studio hour are as follows:

Indirect Labour $ 4.25

Indirect Materials 1.27

Maintenance 0.34

Utilities 0.15

Fixed overhead costs per month are:

Supervision $900

Insurance 700

Property Taxes 400

Depreciation 600

The company believes it will normally operate in a range of 2,000 to 4,000 studio hours per month.

Instructions

Prepare a flexible manufacturing overhead budget for 2,500 studio hours.