| Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 100,000 units per year. The total budgeted overhead at normal capacity is $900,000 comprised of $300,000 of variable costs and $600,000 of fixed costs. Byrd applies overhead on the basis of direct labor hours. During the current year, Byrd produced 72,700 putters, worked 82,300 direct labor hours, and incurred variable overhead costs of $130,860 and fixed overhead costs of $600,300. |
