Krug Company set the following standard unit costs for its single product. Direct materials (5 lbs. @ $2 per lb.) $10.00 Direct labor (0.3 hrs. @ $15 per hr.) 4.50 Factory overhead-variable (0.3 hrs. @ $10 per hr.) 3.00 Factory overhead-fixed (0.3 hrs. @ $14 per hr.) 4.20 Total standard cost $21.70 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 600,000 units per quarter. The following flexible budget information is available. Operating Levels 70% 80% 90% Production in units 420,000 480,000 540,000 Standard 126,000 144,000 162,000 direct labor hours Budgeted overhead Fixed factory $2,016,000 $2,016,000 $2,016,000 overhead Variable factory overhead 1,260,000 1,440,000 1,620,000 During the current quarter, the company operated at 70% of capacity and produced 420,000 units of product; direct labor hours worked were 125,000. Units produced were assigned the following standard costs: Direct materials (2,100,000 lbs. @ $2 $4,200,000 per lb. Direct labor (126,000 hrs. @ $15 per hr.) Factory overhead (126,000 hrs. @ $24 per hr.) Total standard cost 1,890,000 3,024,000 $9,114,000 Actual costs incurred during the current quarter follow: Direct materials (2,000,000 lbs. @ $2.15) $4,300,000 Direct labor (125,000 hrs. @ $15.50) 1,937,500 Fixed factory overhead costs 1,960,000 Variable factory overhead costs 1,200,000 Total actual costs $9,397,500