Given an estimate of machine hours for the next year, the coating department' s projected cost per machine hour is computed. Here are data for the last three operating years. Expected coating machine hours for 2012 are 16,000 hours.
2009 2010 2011
Machine Hours 12,500 8,400 15,200
Coating Materials $ 51,375 $34,440 $62,624
Engineering Support 27,962 34,295 31,300
Maintenance 35,850 35,930 36,200
Occupancy costs(Sq.ft) 27,502 28,904 27,105
Operator Labor 115,750 78,372 147,288
Supervision 46,500 47,430 49,327
Utilities 12,875 8,820 16,112
TOTAL COSTS 317,814 268,191 369,956
a. Estimate the coating department's flexible budget for 2012. Explicitly state and justify the assumptions used in deriving your estimates.
b. calculate the coating department's cost per machine hour for 2012.