Overhead information for Cran-Mar Company for October follows:

Total overhead incurred.............................................$30,000

Budgeted fixed overhead.............................................$7,125

Total standard overhead rate per machine hour (MH).............$4.90

Standard variable overhead rate per MH............................$3.00

Standard MHs allowed for the units manufactured...............3,600

Required

1. What is the standard fixed factory overhead rate per machine hour?

2. What is the denominator activity level that was used to establish the fixed overhead application rate?

3. Prepare a diagram such as the one in Exhibit 15.7, Panel 3, to calculate the following overhead variances for October:

a. Total flexible-budget variance for factory overhead.

b. Fixed overhead production volume variance.

c. Total factory overhead cost variance.