Variable and Fixed Manufacturing Overhead Variances Use the information given in the previous problem, plus the following information, to address issues associated with Kendra Box Company’s manufacturing overhead variances.

The company’s budget shows the following monthly variable manufacturing overhead costs at several production levels:

The company normally produces at 100% of capacity and uses this production level to establish its predetermined manufacturing overhead rates. The following actual information for October is available:

Required:
1. Compute the variable manufacturing overhead cost rate

(a) per box and

(b) per direct labor hour assuming Kendra Box Company produces at normal capacity.
2. Compute the variable manufacturing overhead spending and efficiency variances for October assuming that Kendra produces at normal capacity and that variable manufacturing overhead costs vary with direct labor hours.
3. Compute the fixed manufacturing overhead cost rate

(a) per box and

(b) per direct labor hour.
4. Compute the fixed manufacturing overhead budget and volume variances for October using direct labor hours to establish the predetermined overhead rate.

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Expected number of boxes Expected direct labor hours. Variable manufacturing overhead costs Fixed manufacturing overhead costs Percent of Standard Capacity 80% 90% 100% 20,000 22,500 25,000 40,000 45,000 50,000 $80,000 $90,000 $100,000 $125,000 $125,000 $125,000