Calculating factory overhead The normal capacity of a factory is 8,000 units per month. Cost and production data follow: Standard application rate for fixed overhead . . . . . . . . . . . . . . . . $0.50 per unit Standard application rate for variable overhead . . . . . . . . . . . . . $1.50 per unit ProductionMonth 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,200 units ProductionMonth 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,400 units Actual factory overheadMonth 1 . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,700 Actual factory overheadMonth 2 . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,400 Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month. PROBLEMS