Sedona Company set the following standard costs for one unit of its product for 2017. Direct material (15 Ibs. @ $3.20 per Ib.) Direct labor (10 hrs.@ $9.50 per hr.) Factory variable overhead (10 hrs. @ $4.60 per hr Factory fixed overhead (10 hrs. $2.20 per hr.) 22.00 Standard cost $ 48.00 95.00 46.00 $211.00 The $6.80 ($4.60 + $2.20) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory's capacity of 56,000 units per month. The following monthly flexible budget information is also available. Operating Levels (% of capacit Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) 70% 39,200 75% 42,000 80% 44,800 392,000 420,000 448,000 Variable overhead Fixed overhead Total overhead $1,803,200 $1,932,000 $2,060,800 924,000 $2,727,200 $2,856,000 $2,984,800 924,000 9200 During the current month, the company operated at 70% of capacity, employees worked 371,000 hours, and the following actual overhead costs were incurred. Variable overhead costs $1,716,000 Fixed overhead costs Total overhead costs 1,015,200 $2,731,200 Exerclse 23-17 Computation of total varlable and fixed overhead varlances LO P3 (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 (2) Compute the total variable and total fixed overhead variances and classify each as favorable or unfavorable. At 70% of Operating Capacity Actual Standard Overhead DL Hours Costs Applied Results Variance FaviUnf Variable overhead costs Fixed overhead costs Total overhead costs