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 17,000 labor-hours (the denominator activity level): Variable manufacturing overhead cost Fixed manufacturing overhead cost Total manufacturing overhead cost $ 42,500 76,500 $ 119,000 During the most recent year, the following operating results were recorded: 14,000 15,000 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 $ 49,000 $ 63,750 At the end of the year, the company's Manufacturing Overhead account contained the following data: Actual Manufacturing Overhead 112,750 Applied 7,750 105,000 Management would like to determine the cause of the $7,750 underapplied overhead. Required: 1. Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements. 2. Show how the $105,000 Applied figure in the Manufacturing Overhead account was computed. 3. Breakdown the $7,750 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