Overhead Application, Overhead Variances

Moleno Company produces a single product and uses a standard cost system. The normal production volume is 120,000 units; each unit requires 5 direct labor hours at standard. Overhead is applied on the basis of direct labor hours. The budgeted overhead for the coming year is as follows:

FOH	$2,160,000*
VOH	1,440,000

*At normal volume

During the year, Moleno produced 118,600 units, worked 592,300 direct labor hours, and incurred actual fixed overhead costs of $2,150,400 and actual variable overhead costs of $1,422,800.

Required:

1. Calculate the standard fixed overhead rate and the standard variable overhead rate. Round to two decimal places. Standard fixed overhead rate $fill in the blank 1 per dlh Standard variable overhead rate $fill in the blank 2 per dlh

2. Compute the applied fixed overhead and the applied variable overhead. What is the total fixed overhead variance? Total variable overhead variance? Enter variance amounts as positive numbers and select Favorable or Unfavorable.

Applied fixed overhead		$fill in the blank 3
Applied variable overhead		$fill in the blank 4
Total fixed overhead variance		$fill in the blank 5	FavorableUnfavorable
Total variable overhead variance		$fill in the blank 7	FavorableUnfavorable

3. CONCEPTUAL CONNECTION Break down the total fixed overhead variance into a spending variance and a volume variance. Enter amounts as positive numbers and select Favorable or Unfavorable.

Spending variance		$fill in the blank 9	FavorableUnfavorable
Volume variance		$fill in the blank 11	FavorableUnfavorable

4. CONCEPTUAL CONNECTION Compute the variable overhead spending and efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable.

Spending variance		$fill in the blank 13	FavorableUnfavorable
Efficiency variance		$fill in the blank 15	FavorableUnfavorable