Exercise 10A-2 (Static) Predetermined Overhead Rate; Overhead Variances [LO10-3, L010-4] Norwall Company's budgeted variable manufacturing overhead cost is $3.00 per machine-hour and its budgeted fixed manufacturing overhead is $300,000 per month. The following information is available for a recent month: a. The denominator activity of 60,000 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 60,000 machine-hours, the company should produce 40,000 units of product. c. The company's actual operating results were: Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. 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). Input all amounts as positive values.) \begin{tabular}{|l|l|} \hline 1. Predetermined overhead rate & per MH \\ \hline 1. Variable element & per MH \\ \hline 1. Fixed element & per MH \\ \hline 2. Standard hours allowed for the actual production & MHs \\ \hline 3. Variable overhead rate variance & \\ \hline 3. Variable overhead efficiency variance & \\ \hline 3. Fixed overhead budget variance & \\ \hline 3. Fixed overhead volume variance & \\ \hline \end{tabular}