Required information Use the following information for the Exercises below. [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. Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) Variable overhead Fixed overhead Total overhead Operating Levels (% of capacity) 70% 80% 40,000 35,000 350,000 75% 37,500 375,000 400,000 $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. 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 rcise 21-17 Computation of total variable and fixed overhead variances LO P3 Exercise 21-17 Computation of total variable and fixed overhead variances LO P3 (1) Compute the predetermined overhead application rate per hour for variable overhead, fixed overhead, and total overhead at 75% of capacity. Variable overhead costs Fixed overhead costs Total overhead costs Predetermined OH Rate (2) Compute the total variable and total fixed overhead variances and classify each as favorable or unfavorable. Standard DL Hours ------At 70% of Operating Capacity-- Overhead Costs Applied Actual Results Variable overhead costs Fixed overhead costs Total overhead costs Variance Fav./Unf