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The Panhandle Corporation operates its production departments under a flexible budget with monthly allowances established for 20% intervals

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The Panhandle Corporation operates its production departments under a flexible budget with monthly allowances established for 20% intervals. Capacity is based on direct labor hours with 2,500 direct labor hours representing 100% normal capacity. In the month of October the Shelving Department operated at the 87% level. The exhibit shows budget allowances at the 80% and 100% levels. Flexible Budget Percentage of Capacity Direct labor hours Direct labor costs 80% 2,000 $4,000 100% 2,500 $5,000 Foreman's salary........ Indirect labor.... Clerical salaries.. Factory supplies.. Depreciation... Taxes..... Insurance.. Maintenance. Power $ 500 1,350 700 430 500 250 200 380 360 Total indirect expenses $4,670 $ 500 1,500 750 500 500 250 200 400 400 $5,000 Factory overhead rate $2.335 $2.00 Required: A detailed flexible budget for the 87% level.