Problem 11A-8 Applying Overhead; Overhead Variances [L011-3, LO011-4] 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 $3.00 per standard direct labor-hour and fixed manufacturing overhead should be $735,000 per year The company's product requires 4 pounds of material that has a standard cost of S5.50 per pound and 1.5 hours of direct labor time that has a standard rate of $12.50 per hour. The company planned to operate at a denominator activity level of 105,000 direct labor-hours and to produce 70,000 units of product during the most recent year. Actual activity and costs for the year were as follows: Number of units produced Actual direct labor-hours worked Actual variable manufacturing overhead cost incurrec Actual fxed manufacturing overhead cost incurred 84,000 136,500 $259,350 $750,750 Required: 1. Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed elements. (Round your answers to 2 decimal places.) Predetermined overhead rate Variable rate Fixed rate per DLH per DLH per DLH 2. Prepare a standard cost card for the company's product. (Round your answers to 2 decimal places.) Direct materials Direct labor Variable overhead Fixed overhead Standard cost per unit pounds at DLHs at DLHs at DLHs at per pound per DLH per DLH per DLH 3a. Compute the standard direct labor-hours allowed for the year's production. 3b. Complete the following Manufacturing Overhead T-account for the year: Manufacturing Overhead 4. Determine the reason for the underapplied or overapplied overhead from (3) above by computing the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.) Variable overhead rate variance Variable overhead efficiency variance Fixed overhead budget variance Fixed overhead volume variance