Baird Company makes classic Polish sausage. The company uses a standard cost system to help control costs. Manufacturing

overhead is applied to production on the basis of standard direct labor$-$hours. According to the company's planning budget, the

following manufacturing overhead costs should be incurred at an activity level of $18,000$ labor$-$hours $($the denominator activity level$)$:

During the most recent year, the following operating results were recorded:

At the end of the year, the company's Manufacturing Overhead account contained the following data:

Management would like to determine the cause of the $$9,000$ underapplied overhead.

Required:

Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements.

Show how the $$120,000$ Applied figure in the Manufacturing Overhead account was computed.

Break down the $$9,000$ underapplied overhead into four components: $(1)$ variable overhead rate variance, $(2)$ variable overhead

efficiency variance, $(3)$ fixed overhead budget variance, and $(4)$ fixed overhead volume variance.

Complete this question by entering your answers in the tabs below.

Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements. $($Round your

answers to $2$ decimal places.$)$

Predetermined overhead rate