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 25.000 labor-hours (the denominator activity level): Variable manufacturing overhead cost Fixed manufacturing overhead cost Total manufacturing overhead cost $ 112,500 162,500 $ 275,000 During the most recent year, the following operating results were recorded: 22,000 23,000 Activity: Actual labor-hours worked Standard labor-hours allowed for the actual output Cost: Actual variable manufacturing overhead cost incurred Actual fixed manufacturing overhead cost incurred $ 129,800 $ 143,750 At the end of the year, the company's Manufacturing Overhead account contained the following data: Manufacturing Overhead Debit Credit 273,550 Applied 20,550 Actual 253,000 Management would like to determine the cause of the $20,550 underapplied overhead. Required: 1. Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements. 2. Show how the $253,000 Applied figure in the Manufacturing Overhead account was computed. 3. Break down the $20,550 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