Colliers Company has determined that the variable overhead rate is $2.90 per direct labor hour in the Fabrication Department. The normal production capacity for the Fabrication Department is 14,000 for the month. Fixed costs are budgeted at $65,800 for the month.
a. Prepare a monthly factory overhead flexible budget for 13,000, 14,000, and 15,000 hours of production.
b. How much overhead would be applied to production if 15,000 hours were used in the department during the month?