Part 8 Coinpute overhead and analyan volume and spending variances. So lected data for the Seattle Magufacturing Company for the year 2006 follow: Direct Labor Hours Manufacturing Overhead Fixed Variable Total Overhead Budgeted for Year 60,000 5 42,000 168,000 $710.000 Actual for Year 62.400 $ 42,000 171.100 $273.100 Overhead was applied on the basis of direct labor hours. Instructions 1. Compute the overhead application rate. 2. Compute the applied overhead for the year. 3. Compute the total averapplied or underapplied overhead for the year. 4. Analyze the total overapplied or underapplied overhead into a volume variance and spending variance Problem 1. Overhead Application Rate =- per hour $ 2. Overhead Applied per hour X bours 3. Overapplied or Underapplied Overhead - Actual Overhead - Overhead Applied applied Overbeads 4. Volume Vartance Fixed overhead applied Fixed overhead budgeted Volume Vitriance Spending Variance: Actual overhead for year Budgeted overhead for hours worked Fixed Variable XS Total budgeted Spending variance Total Vartance -1