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Addison Co. budgets production of 2,400 units during the second quarter. In addition, information on its direct labor and its variable and fixed overhead is shown below. For the second quarter, prepare (1) a direct labor budget and (2) a factory overhead budget.
Direct labor Each finished unit requires 4 direct labor hours, at a cost of $20 per hour. Variable overhead Applied at the rate of$11 per direct labor hour. Fixed overhead Budgeted at $450,000 per quarter.
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