Ayayai Company produces one product, a putter called PAR-putter. Ayayai uses a standard cost system and determines that it should take one hour of direct labor to produce one PAR-putter. The normal production capacity for the putter is 100,000 units per year. The total budgeted overhead at normal capacity is $502,000 comprised of $201,000 of variable costs and $301,000 of fixed costs. Ayayai applies overhead on the basis of direct labor hours. During the current year, the company produced 85,100 putters, paid employees for 89,100 direct labor hours, and incurred variable overhead costs of $162,000 and fixed overhead costs of $301,000.

Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answer to 2 decimal places, e.g. 52.75.)

Variable Overhead Rate		$enter a dollar amount rounded to 2 decimal places
Fixed Overhead Rate		$enter a dollar amount rounded to 2 decimal places

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Compute the applied overhead for Ayayai for the year.

Applied Overhead

$enter the applied overhead in dollars

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Compute the total overhead variance. Identify whether the variance is favorable or unfavorable.

Total Overhead Variance

$enter the total overhead variance in dollars

select an option UnfavorableNot ApplicableFavorable