[wair13]

Flexible budget for machine hours.
Variable costs $8.30
Fixed costs $2,000
Range of activity, 2000 hours, 3,000 hours, 4000 hours?

[rehmanvohra]

Calculate fixed overhead rate per hour for each activity as follows:

Fixed costs/Activity level

Since fixed costs remain constant in total, it will change per hour as the level of activity increases.

Now add the variable costs to fixed costs per hour for each activity and you have the answer.