Sedona Company set the following standard costs for one unit of its product for 2017.

Direct material (15 Ibs. @ $3.20 per Ib.)		$	48.00
Direct labor (10 hrs. @ $7.00 per hr.)			70.00
Factory variable overhead (10 hrs. @ $4.10 per hr.)			41.00
Factory fixed overhead (10 hrs. @ $1.70 per hr.)			17.00
Standard cost		$	176.00

The $5.80 ($4.10 + $1.70) total overhead rate per direct labor hour is based on an expected operating level equal to 70% of the factory's capacity of 51,000 units per month. The following monthly flexible budget information is also available.

		Operating Levels (% of capacity)
Flexible Budget			65%				70%				75%
Budgeted output (units)			33,150				35,700				38,250
Budgeted labor (standard hours)			331,500				357,000				382,500
Budgeted overhead (dollars)
Variable overhead		$	1,359,150			$	1,463,700			$	1,568,250
Fixed overhead			606,900				606,900				606,900
Total overhead		$	1,966,050			$	2,070,600			$	2,175,150

During the current month, the company operated at 65% of capacity, employees worked 320,000 hours, and the following actual overhead costs were incurred.

Variable overhead costs		$	1,325,000
Fixed overhead costs			649,650
Total overhead costs		$	1,974,650

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 70% 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 65% of Operating Capacity-.. Standard DL Overhead Actual Hours Costs Applied Results Variance Variable overhead costs Fixed overhead costs Total overhead costs