Problem 11A-8 Applying Overhead; Overhead Variances [LO11-3, LO11-4] 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 $2.80 per standard direct labor-hour and fixed manufacturing overhead should be $612,000 per year. The company's product requires 4 pounds of material that has a standard cost of $5.00 per pound and 1.5 hours of direct labor time that has a standard rate of $12.40 per hour The company planned to operate at a denominator activity level of 90,000 direct labor-hours and to produce 60,000 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 incurred Actual fixed manufacturing overhead cost incurred 72,000 117,000 210,600 S643,500 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 per DLH per DLH per DLH Fixed rate 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 anance Fixed overhead budget variance Fixed overhead volume variance