Sedona Company set the following standard costs for one unit of its product for this year. Direct material (30 Ibs. @ $2.20 per Ib.) $ 66.00 Direct labor (10 hrs. @ $4.60 per hr.) 46.00 Variable overhead (10 hrs. @ $3.00 per hr.) 30.00 Fixed overhead (10 hrs. @ $1.50 per hr.) 15.00 Total standard cost $ 157.00

The $4.50 ($3.00 + $1.50) total overhead rate per direct labor hour is based on an expected operating level equal to 70% of the factory's capacity of 65,000 units per month. The following monthly flexible budget information is also available.

Operating Levels (% of capacity) Flexible Budget 65% 70% 75% Budgeted output (units) 42,250 45,500 48,750 Budgeted labor (standard hours) 422,500 455,000 487,500 Budgeted overhead (dollars) Variable overhead $ 1,267,500 $ 1,365,000 $ 1,462,500 Fixed overhead 682,500 682,500 682,500 Total overhead $ 1,950,000 $ 2,047,500 $ 2,145,000

During the current month, the company operated at 65% of capacity, employees worked 400,000 hours, and the following actual overhead costs were incurred. Variable overhead costs $ 1,224,000 Fixed overhead costs 730,000 Total overhead costs $ 1,954,000

(1) Compute the predetermined overhead application rate per hour for total overhead, variable overhead, and fixed overhead.
	Predetermined OH Rate
Variable overhead costs	$1,224,000.00	per DL hr.
Fixed overhead costs	730,000.00	per DL hr.
Total overhead costs	$1,954,000.00	per DL hr.
(2) Compute the total variable and total fixed overhead variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Rate per hour" answers to 2 decimal places.)
			--------At 65% of Operating Capacity--------
	Predetermined OH Rate	Standard DL Hours	Overhead Costs Applied	Actual Results	Variance	Fav./Unf.
Variable overhead costs	$1,224,000.00
Fixed overhead costs	730,000.00
Total overhead costs	$1954000.00