Berne, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows:
Indirect labor.........................$6.00
Indirect materials....................2.50
Maintenance............................0.80
Utilities....................................0.30
Fixed overhead costs per month are:
Supervision............................$600
Insurance.................................200
Property taxes.........................300
Depreciation............................900
The company believes it will normally operate in a range of 2,000 to 4,000 machine hours per month.
Instructions:
Prepare a flexible manufacturing overhead budget for the expected range of activity, using increments of 1,000 machine hours.