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 company's flexible budget, the following manufacturing overhead costs should be incurred at an activity level of 17,000 labor-hours (the denominator activity level): During the most recent year, the following operating results were recorded: At the end of the year, the company's Manufacturing Overhead account contained the following data: Management would like to determine the cause of the $7, 750 underapplied overhead. Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements. Show how the $105,000 Applied figure in the Manufacturing Overhead account was computed. Analyze the $7, 750 underapplied overhead figure in terms of the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances