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The November monthly factory overhead cost budget for Brass Ltd. at normal capacity of 10,000 or 5,000 direct labor hours follows: Variable: Power$ 6,000 Supplies12,000

The November monthly factory overhead cost budget for Brass Ltd. at normal capacity of 10,000 or 5,000 direct labor hours follows:

Variable:

Power$ 6,000

Supplies12,000

Maintenance15,000

Total variable factory overhead33,000

Fixed:

Supervisory salaries24,000

Depreciation of buildings and equipment8,000

Lights and heat6,000

Property tax and insurance 22,000

Total fixed factory overhead60,000

Total factory overhead$93,000

(1) Prepare a flexible budget for 80%, 100% and 120% of normal capacity.

(2) Determine the rate for application of factory overhead to work in process at each level of volume in relation to both units and direct labor hours.

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