Ana Carillo and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive homes, restaurants, and hotels. Although some of the work is custom, many of the cabinets are a standard size. One such 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 740 units were produced; 4,500 direct labor hours were allowed for standard production, but only 4,000 hours were used. Standard and actual overhead costs were as follows.

		Standard (1,000 units)			Actual (740 units)
Indirect materials		$ 10,200			$ 10,400
Indirect labor		36,400			43,200
(Fixed) Manufacturing supervisors salaries		19,100			18,600
(Fixed) Manufacturing office employees salaries		11,000			10,600
(Fixed) Engineering costs		22,900			21,200
Computer costs		8,500			8,500
Electricity		2,100			2,100
(Fixed) Manufacturing building depreciation		6,800			6,800
(Fixed) Machinery depreciation		2,500			2,500
(Fixed) Trucks and forklift depreciation		1,300			1,300
Small tools		600			1,200
(Fixed) Insurance		400			400
(Fixed) Property taxes		300			300
Total		$122,100			$127,100

(a)

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Your answer is correct.

Determine the overhead application rate. (Round answer to 2 decimal places, e.g. 15.75.)

Overhead application rate

$24.2

per direct labor hour

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(b)

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Your answer is correct.

Determine how much overhead was applied to production.

Applied overhead

$109890

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(c)

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Your answer is partially correct.

Calculate the total overhead variance, controllable variance, and volume variance. (Round variable overhead to 2 decimal places and final answers to 0 decimal places, e.g. 1,575.)

Total overhead variance		$	17210 Unfavorable
Controllable variance		$	unfavorable
Volume variance		$	Unfavorable