The following budget information relates to Mercedes Benz Corporation.

Variable manufacturing overhead costs per machine hour are as follows:

Indirect Labor $7.30

Indirect Materials 3.55

Maintenance .97

Utilities .53

Fixed overhead costs per month are:

Supervision $900

Insurance 500

Property Taxes 600

Depreciation 300

The normal operating range is 4,000 to 8000 machine hours per month.

INSTRUCTIONS

Mercedes-Benz would like a flexible manufacturing overhead budget prepared

based on machine hours. Given the range of activity above, prepare the

budget using increments of 2,000 machine hours.