Overhead application rate LO₃ Schertzer Manufacturing Company uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows:

Required:
Compute the variable and fixed factory overhead rates per direct labor hour and the total fixed factory overhead based on normal activity.

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Materials, 20 yards @ $0.90 per yard.. Direct labor, 4 hours @ $9.00 per hour Total factory overhead (the ratio of variable costs to fixed costs is 3 to 1)...... Total unit cost. $18 36 32 $86 The standards are based on normal activity of 2,400 direct labor hours. Actual activity for October follows: Materials purchased, 18.000 yards @ $0.92 per yard...... Materials used, 9,500 yards Direct labor, 2,100 hours @ $9.15 per hour... Total factory overhead, 500 units actually produced $16,560 19,215 17,760