a. Determine the overhead application rate.

25.70

b. Determine how much overhead was applied to production.

114365

c. Calculate the controllable overhead variance and the overhead volume variance.

- 19535

- ?

- ?

d. Decide which overhead variances should be investigated.

?

e. Discuss causes of the overhead variances. What can management do to improve its performance next month?

One non-custom model is called Luxury Base Frame Normal production is 1.000 units. Each unit has a direct labor hour standard of 5 hours. Overhead is applied to production based on standard direct labor hours. During the most recent month, only 890 units were produced; 4.450 direct labor hours were allowed for standard production, but only 4.000 hours were used. Standard and actual overhead costs were as follows