Refer to the information for Ionia Inc. above.
Ionia Inc. produces a variety of shampoos, conditioners, and hair care products. Ionia€™s controller has developed standard costs for the following four overhead items:

Next year, Ionia expects production to require 140,000 direct labor hours.
Required:
1. Prepare an overhead budget for the expected level of direct labor hours for the coming year.
2. Prepare an overhead budget that reflects production that is 15 percent higher than expected, and for production that is 15 percent lower than expected.

Transcribed Image Text:

Overhead Item Maintenance Power Indirect labor Rent Total Fixed Cost $173,000 128,000 Variable Rate per Direct Labor Hour $0.20 0.45 2.10 30,000