Chilczuk, S.A., of Gdansk, Poland, is a major producer of 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 companys flexible budget, the following manufacturing overhead costs should be incurred at an activity level of 12,000 labor-hours (the denominator activity level):

Variable manufacturing overhead cost	$	15,000
Fixed manufacturing overhead cost		39,000
Total manufacturing overhead cost	$	54,000

During the most recent year, the following operating results were recorded:

Activity:
Actual labor-hours worked		9,000
Standard labor-hours allowed for output		10,000
Cost:
Actual variable manufacturing overhead cost incurred	$	18,000
Actual fixed manufacturing overhead cost incurred	$	30,000

At the end of the year, the companys Manufacturing Overhead account contained the following data:

Manufacturing Overhead

Actual	48,000		Applied	45,000
	3,000

Management would like to determine the cause of the $3,000 underapplied overhead.

Required:
1.	Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements. (Round your answers to 2 decimal places.)

2.	Show how the $45,000 Applied figure in the Manufacturing Overhead account was computed. (Round your per hour value to 2 decimal places.)

3.	Analyze the $3,000 underapplied overhead figure in terms of the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)