Prepare a monthly performance report; develop a flexible overhead budget. (Objs. 3, 6). The monthly fixed cost element of indirect labor in the Forming Department of Taylor Company is $12,000, and the variable cost element is $2.20 per direct labor hour. During May 19X9, production was 4,200 direct labor hours. Indirect labor costs were $20,780.

a. Compute the amount of budget variance for indirect labor for the month.

b. What would be the expected indirect labor costs for each of the following levels of activity?

(1) 5,100 direct labor hours

(2) 5,340 direct labor hours LO.1