NOTE: YOU MUST SHOW ALL CALCULATIONS IN ORDER TO RECEIVE FULL CREDIT!

4. Overhead (OH) Variances: Better Than That Co. provided the following information regarding Factory Overhead (OH) from its flexible OH budget. The company has an operating capacity of 20,000 units and expects to operate at 75% of its productive capacity (i.e. at 15,000 units, which is 75%*20,000):

	Operating Levels (% of capacity)
Flexible OH Budget:	70%	75%	80%	85%
Budgeted output (units)	14,000	15,000	16,000	17,000
Budgeted DL hours	21,000 DLh	22,500 DLh	24,000 DLh	25,500 DLh
Budgeted OH:
Variable OH	$100,800	$108,000	$115,200	$122,400
Fixed OH	$39,375	$39,375	$39,375	$39,375
Total OH	$140,175	$147,375	$154,575	$161,775

During the current month, the company actually operated at 80% capacity and actually used 23,800 DL hours to produce 16,000 units. The following actual overhead costs were incurred:

Actual Variable OH: $117,400

Actual Fixed OH: $39,000

Actual Total OH: $156,400

• Calculate the predetermined standard OH rate per DL hour for:

• Variable OH

• Fixed OH

• Total OH

• Calculate the Variable OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

• Calculate the Fixed OH Volume Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

• Calculate the Fixed OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

• Calculate the Total OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).