Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs...
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Accounting
Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items:
Overhead
Total Fixed Cost
Variable Rate per
Item
Direct Labor Hour
Maintenance
$86,000
$0.20
Power
0.45
Indirect labor
140,000
2.10
Rent
35,000
Next year, Palladium expects production to require 85,000 direct labor hours.
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% higher than expected, and for production that is 15% lower than expected.
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