Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $4.20 per standard direct labor-hour and fixed manufacturing overhead should be $1,599,000 per year.

The companys product requires 4 pounds of material that has a standard cost of $8.50 per pound and 1.5 hours of direct labor time that has a standard rate of $13.10 per hour.

The company planned to operate at a denominator activity level of 195,000 direct labor-hours and to produce 130,000 units of product during the most recent year. Actual activity and costs for the year were as follows:

Number of units produced	156,000
Actual direct labor-hours worked	253,500
Actual variable manufacturing overhead cost incurred	$ 633,750
Actual fixed manufacturing overhead cost incurred	$ 1,774,500