Che 4 Direct material (20 Ibs. $3.20 per Ib.) Direct labor (10 hrs. @$8.30 per hr. ) Factory variable overhead (10 hrs. a $4.70 per hr.) 64.00 83.e0 47.ee Part 1 of 2 Factory fixed overhead (10 hrs. $2.30 per hr.) 23.00 $217.00 Standard cost 16.66 points The $7.00 ($4.70$2.30) total overhead rate per direct labor hour is based on an expected operating level equal to 5kipped budget informat he factory's capacity of 57,000 units per month. The following monthly flexible mation is also available. Operating Levels (% of capacity) Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) Variable overhead Fixed overhead 55% 60% 65% eBook 31,350 37,e5e 34,200 370,500 313,50e 342,000 Hint $1,473,450 786,600 $1,607,400 786,600 $1,741,350 786,600 Print $2,260,05e $2,394,eee $2,527,950 Total overhead References During the current month, the company operated at 55% of capacity, employees worked 295,000 hours, and the following actual overhead costs were incurred. Variable overhead costs $1,411,e00 Fixed overhead costs 858,05e $2,269,050 Total overhead costs AH Actual Hours SH Standard Hours AVR Actual Variable Rate SVR Standard Variable Rate SFR Standard Fixed Rate Exercise 21-17 Computation of total variable and fixed overhead variances LO P3 609% of ehe predetermined overhead application rate per hour for variable overhead, fixed overhead, and total overhead at Predetermined OH Rate Variable overhead costs Fixed overhead costs Total overhead costs (2) Compute the total variable and total fixed overhead variances and classify each as favorable or unfavorable. --At 55% of Operating Capacity Standard DL Overh Costs Applied Variance Fav.JUnf. Hours Results Variable overhead costs Fixed overhead costs Total overhead costs Exercise 21-18A Computation and interpretation of overhead spending, efficiency, and volume variances LO P4 1. Compute the variable overhead spending and efficiency variances. Flexible Budget Actual Variable OH Cost Standard Cost (VOH applied) 2. Compute the fixed overhead spending and volume variances and classify each as favorable or unfavorable. Fixed OH (Fixed Budgeted) Standard Cost (FOH applied) Actual Fixed OH cost 3. Compute the controllable variance. Controllable Variance Controllable variance