Question
Exercise 23-19 Computation of total overhead rate and total overhead variance LO P3 World Company expects to operate at 60% of its productive capacity of
Exercise 23-19 Computation of total overhead rate and total overhead variance LO P3
World Company expects to operate at 60% of its productive capacity of 17,000 units per month. At this planned level, the company expects to use 6,630 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.650 direct labor hours per unit. At the 60% capacity level, the total budgeted cost includes $13,260 fixed overhead cost and $99,450 variable overhead cost. In the current month, the company incurred $108,430 actual overhead and 6,250 actual labor hours while producing 8,900 units. (Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.)
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