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 8-28A (Algo) Detailed overhead variances LO P5 AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR = Standard Variable Rate 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances. 3. Compute the controllable variance.