Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 lbs. @ $2.50 per lb.) Direct labor (10 hrs. @ $22.00 per hr.) Variable overhead (10 hrs. @ $4.00 per hr.) Fixed overhead (10 hrs. @ $1.60 per hr.) Total standard cost $ 50.00 220.00 40.00 16.00 $326.00 The $5.60 ($4.00 + $1.60) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory's capacity of 50,000 units per month. The following monthly flexible budget information is also available. Operating Levels (% of capacity) 70% 75% 80% 35,000 37,500 40,000 350,000 375,000 400,000 Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) Variable overhead Fixed overhead Total overhead $1,400,000 600,000 $2,000,000 $1,500,000 600,000 $2,100,000 $1,600,000 600,000 $2,200,000 During the current month, the company operated at 70% of capacity, employees worked 340,000 hours, and the following actual overhead costs were incurred. AH = Actual Hours Variable overhead costs $1,375,000 SH = Standard Hours Fixed overhead costs 628,600 AVR = Actual Variable Rate Total overhead costs $2,003,600 SVR = Standard Variable Rate Actual Variable OH Cost Flexible Budget Standard Cost (VOH applied) $ 0 Actual Fixed OH cost Fixed OH (Fixed Budgeted) Standard Cost (FOH applied) $ 0 Controllable Variance Controllable variance