Required information [The following information applies to the questions displayed below.] Sedona Company set the following standard costs for one unit of its product for 2017. Direct material (20 Ibs. @ $2.50 per Ib. ) Direct labor (10 hrs. @ $22.00 per hr.) Factory variable overhead (10 hrs. @ $4.00 per hr.) Factory fixed overhead (10 hrs. @ $1.60 per hr.) Standard cost $ 50.00 220.00 40.00 16.00 $326.00 The $5.60 ($4.00 + $1.60) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory's capacity of 50,000 units per month. The following monthly flexible budget information is also available. Operating Levels (% of capacity) 70% 75% 80% 35,000 37,500 40,000 350,000 375,000 400,000 Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) Variable overhead Fixed overhead Total overhead $1,400,000 600,000 $2,000,000 $1,500,000 600,000 $2,100,000 $1,600,000 600,000 $2,200,000 During the current month, the company operated at 70% of capacity, employees worked 340,000 hours, and the following actual overhead costs were incurred. Variable overhead costs Fixed overhead costs Total overhead costs $1,375,000 628,600 $2,003,600 AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR = Standard Variable Rate SFR = Standard Fixed Rate (1) Compute the predetermined overhead application rate per hour for variable overhead, fixed overhead, and total overhead at 75% of capacity. Predetermined OH Rate Variable overhead costs Fixed overhead costs Total overhead costs Fav./Unf. (2) Compute the total variable and total fixed overhead variances and classify each as favorable or unfavorable. --------At 70% of Operating Capacity-------- Standard DL Overhead Costs Actual Results Variance Hours Applied Variable overhead costs Fixed overhead costs Total overhead costs