Sundazzler Designs has prepared the annual manufacturing budget for its line of specialty pergolas. It estimated annual production of 3,000 pergolas during 2022. Each pergola will require 54 pounds of lumber and one metal kit (which includes attachments and decorative embellishments.). The lumber used in these pergolas costs $1.50 per pound, and the metal kits cost $170 each. Each pergola will use two kinds of labor2 hours of type I labor from people who run the cutting saws and finishing tools, and 3 hours of work from type II workers who attach the metal reinforcements and other hardware. The type I employees are paid $15 per hour, and the type II are paid $12 per hour.

The Manufacturing Overhead budget is listed below:

Variable costs
Indirect materials	$42,000
Manufacturing supplies	58,800
Maintenance and utilities	72,000
Total variable MOH:	172,800
Fixed costs
Supervision	60,000
Insurance	16,000
Depreciation	132,000
Total fixed MOH:	208,000
Total	$380,800

Requirement 2:

Peak sales occur during the summer months, so management expects production to be highest in the first two quarters of the year. Prepare the flexible budget for manufacturing for the quarter ended March 31, 2022, assuming that production is a) 750 units, b) 900 c) 1,050 units and d) 1,200 units. You have to prepare a separate budget for each level of activity. (Hint: The fixed costs above were for the entire year. This budget is for the quarter only).