Mugbe Company has developed the following standard overhead costs based on a denominator level of activity of 1,240,000 direct labour-hours (DLHs):

Variable overhead costs	4 DLHs at $5	$20
Fixed overhead costs	4 DLHs at $6	$24

During April, 270,000 units were produced. The following information relates to April's production:

1. The production staff worked 1,100,000 DLHs.
2. Actual overhead cost incurred totalled $12,630,000 ($5,280,000 variable and $7,350,000 fixed)

Required:

a) Calculate the expected output in units based on the denominator level of activity. (1 mark)

Expected output in units

b) Calculate the standard hours allowed for actual production. (2 marks)

Expected output in units

c) What is the flexible budget fixed overhead? (2 marks)

	$
Expected output in units	$

d) Calculate the variable overhead variances and indicate if they are favourable (F) or unfavourable (U). (4 marks) Please enter unfavourable and favourable variances as positive numbers.

VOH rate variance	$
VOH efficency variance	$

e) Calculate the fixed overhead variances. (4 marks) Please enter unfavourable favourable variances as positive numbers.

FOH budget variance	$
FOH volume variance	$

f) How much was the variable overhead over- or under-applied for April. (1 mark) Please enter unfavourable and favourable variances as positive numbers.

Total over- or under-applied overhead

$

g) Calculate the predetermined overhead rate if the denominator level of activity was 1,200,000 DLHs. Assume this activity level is within the relevant range. (1 mark)

New predetermined overhead rate

$