The accountant for Bright Products, Inc., has analyzed the manufacturing overhead costs for the companys assembly department. The fixed and variable costs follow:

	Variable Cost Element per Hour				Monthly Fixed Cost Element
Indirect labor	$	1.70			$	1,870
Payroll taxes		0.32				170
Indirect materials		0.22				170
Utilities		0.47				270
Depreciation		-				1,270
Taxes and insurance		-				570
Maintenance		0.32				270

Required:

Prepare a flexible budget for the department for the month of May 20X1, assuming that the expected production is for 3,200 direct labor hours. Show costs for production levels of 90 percent and 110 percent of the expected production level of 3,200 hours.

Assume that during the month of May, actual production was 2,600 hours. Actual costs for the month were as follows:

Indirect labor	$	6,233
Payroll taxes		795
Indirect materials		764
Utilities		1,539
Depreciation		1,270
Taxes and insurance		538
Maintenance		1,070

Prepare a departmental monthly overhead performance report comparing actual costs with the budget allowance for the total number of hours worked. Analyze: If Bright Products, Inc., operates at the expected production level of 3,200 direct labor hours, what total manufacturing overhead cost is projected per direct labor hour?