Great-Cut processes bags of frozen organic vegetables sold at specialty grocery stores. Great-Cut allocates manufacturing overhead based on direct labour hours. Great-Cut has projected total overhead for the year to be $765,000. Of this amount, $595,000 relates to fixed overhead expenses. Great-Cut expects to process 170,000 cases of frozen organic vegetables this year. The direct labour standard for each case is 1/4 hour.
Requirements
1. Compute the standard variable overhead rate.
2. Compute the fixed overhead rate.
3. Compute the standard total overhead rate.