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.