Myers company uses a flexible budget for manufacturing overhead based on direct labor hours. variable manufacturing overhead costs per direct labor hour are as follows. indirect labor $1.20 indirect materials 0.50 utilities 0.20 fixed overhead costs per month are supervision $4,400, depreciation $1,500, and property taxes $500. the company believes it will normally operate in a range of 7,700–10,700 direct labor hours per month. prepare a monthly manufacturing overhead flexible budget for 2017 for the expected range of activity, using increments of 1,000 direct labor hours.

M. cotteleer electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. one of the components has an annual demand of 235 units, and this is constant throughout the year. carrying cost is estimated to be $1.25 per unit per year, and the ordering (setup) cost is $21 per order. a) to minimize cost, how many units should be ordered each time an order is placed? b) how many orders per year are needed with the optimal policy? c) what is the average inventory if costs are minimized? d) suppose that the ordering cost is not $21, and cotteleer has been ordering 125 units each time an order is placed. for this order policy (of q = 125) to be optimal, determine what the ordering cost would have to be.