Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 pounds @ $2.60 per pound) $ 52.00 Direct labor (10 hours @ $8.00 per DLH) 80.00 Variable overhead (10 hours @ $4.40 per DLH) 44.00 Fixed overhead (10 hours @ $2.00 per DLH) 20.00 Standard cost per unit $ 196.00 The $6.40 ($4.40 + $2.00) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,500 units, which is 75% of the factorys capacity of 54,000 units per month. The following monthly flexible budget information is available. Flexible Budget Operating Levels (% of capacity) 70% 75% 80% Budgeted production (units) 37,800 40,500 43,200 Budgeted direct labor (standard hours) 378,000 405,000 432,000 Budgeted overhead Variable overhead $ 1,663,200 $ 1,782,000 $ 1,900,800 Fixed overhead 810,000 810,000 810,000 Total overhead $ 2,473,200 $ 2,592,000 $ 2,710,800 During the current month, the company operated at 70% of capacity, direct labor of 365,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead $ 1,625,000 Actual fixed overhead 854,000 Actual total overhead $ 2,479,000 Exercise 8-27A (Algo) Computing total variable and fixed overhead variances LO P5 1. Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)