Toto Dog Toys developed it annual manufacturing overhead budget for it's master budget for 2022 as follows:

Expected Annual Operating Capacity: 90,000 Direct Labour Hours

Variable overhead costs	$360,000
Indirect Labour	27,000
Factory Supplies	63,000
Total Variable costs	450,000
Fixed overhead cost
Depreciation	72,000
Supervision	70,000
Property Taxes	12,000
Total Fixed Costs	154,000
Total Costs	604,000

The relevant range for activity is expected to be between 80,000 and 100,000 direct labour hours.

Prepare a flexible budget for an activity level of 85,000 direct labour hours.