Exercise 10A-2 Predetermined Overhead Rate; Overhead Variances [LO10-3, LO10-4]

Norwall Company's variable manufacturing overhead should be $1.80 per standard machine-hour and its fixed manufacturing overhead should be $54,868 per month.

The following information is available for a recent month:

a.	The denominator activity of 25,520 machine-hours is used to compute the predetermined overhead rate.
b.	At the 25,520 standard machine-hours level of activity, the company should produce 11,600 units of product.
c.	The companys actual operating results were:

Number of units produced		12,840
Actual machine-hours		26,070
Actual variable manufacturing overhead cost	$	49,533
Actual fixed manufacturing overhead cost	$	56,300

Required:

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

2.	Compute the standard hours allowed for the actual production.

3.	Compute 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). Round your intermediate calculations and final answers to 2 decimal places.)