Larry Berry, controller for Columbus Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of...

Larry Berry, controller for Columbus Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of frozen desserts: Icey and Tasty. The two desserts use common raw materials in different proportions. The company expects to produce 200,000 gallons of each product during the coming year. Icey requires 0.25 direct labor hour per gallon and tasty requires 0.30. Larry has developed the following fixed and variable costs for each of the four overhead items;

Overhead Item:Fixed CostVariable Rate per DLH

Maintenance$52,000$1.20

Power$1.50

Indirect labor$79,000$4.80

Rent$ 54,000

1).Form an overhead budget for the expected activity level for the coming year

2). form an overhead budget that reflects production that is 10% higher than expected (for both products). Assume this quantity is within the relevant range.