Companys variable manufacturing overhead should be $2.50per standard direct labor-hour and fixed manufacturing should be $180,000 per year.

The company manufactures a single product that requires 2.5 direct labor-hours to complete. The direct labor wage rate is $10 per hour. Three feet of raw material are required for each unit of product; the standard cost of the material is $7 per foot.

Although normal activity is 50,000 direct labor-hours each year, the company expects to operate at a 60,000-hour level of activity this year.

Required:
1.	Assume that the company chooses 50,000 direct labor-hours as the denominator level of activity. Compute the predetermined overhead rate, breaking it down into variable and fixed cost elements.(Round your answers to 2 decimal places.)

2.	Assume that the company chooses 60,000 direct labor-hours as the denominator level of activity. Repeat the computations in (1) above. (Round your answers to 2 decimal places.)

3.	Complete two standard cost cards as outlined below. (Round your answers to 2 decimal places.)

4.	Assume that the company actually produces 21,200 units and works 54,000 direct labor-hours during the year. Actual manufacturing overhead costs for the year are:

Variable manufacturing overhead cost	$ 136,000
Fixed manufacturing overhead cost	181,500
Total manufacturing overhead cost	$ 317,500

a.	Compute the standard direct labor-hours allowed for this years production.

b.	Complete the Manufacturing Overhead account below. Assume that the company uses 50,000 direct labor-hours (normal activity) as the denominator activity figure in computing predetermined overhead rates, as you have done in (1) above.

c.	Determine the cause of the underapplied or overapplied overhead for the year by computing 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).)