Sedona Company set the following standard costs for one unit of its production for 2017.
Required information Use the following information for the Exercises below. The following information applies to the questions displayed below Sedona Company set the following standard costs for one unit of its product for 2017 Direct material (30 Ibs. $2.30 per Ib.) Direct labor (28 hrs. $4.30 per hr.) Factory variable overhead (20 hrs. $2.30 per hr.) Factory fixed overhead (20 hrs. e$1.20 per hr.) Standard cost $ 69.00 86.80 46.00 24.00 $225.00 The $3.50 ($2.30 + $1.20) total overhead rate per direct labor hour is based on an expected operating level equal to 60% of the factory's capacity of 69000 units per month, The following monthly flexible budget information is also available. Operating Levels (% of ca Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) 55% 37,950 759,000828,000897,00 68% 41,403 65% 44,850 $1 745,700 $1.904,400 $2,63,100 Variable overhead Fixed overhead 993 600993 690998 609 The $3.50 ($2.30 + $1.20) total overhead rate per direct labor hour is based on an expected operating level equal to 60% of the factory's capacity of 69,000 units per month. The following monthly flexible budget information is also avalable Operating Levels (% of capaci 55% 37,950 60% 41,400 65% Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) 44,850 897,80 759,000 828,000 $1,745,7ee $1,904,400 $2,063,180 Variable overhead Fixed overhead Total overhead 993,60993 600993,688 $2,739,300 $2,898,000 $3,056,700 During the current month, the company operated at 55% of capacity, employees worked 731,000 hours, and the following actual overhead costs were incurred. Varlable overhead cost Fixed overhead costs $1,710,000 1.031.500 Total overhead costs 2,741,500 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 varlable overhead, fixed overhead, and total overhead at 60% 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 55% of Operating Capacity - Standard DL OverheadActual Hours Costs Applied Results VarianceFav/Unf Variable overhead costs Fixed overhead costs Total overhead costs 1. Compute the variable overhead spending and efficiency variances Actual Variable OH Cost Flexible Budget Standard Cost (VOH applied 2 Compute the fixed overhead spending and vol ume variances and classify each as favorable or unfavorable. Actual Fixed OH cost Fixed OH (Fixed Budgeted) Standard Cost (FOH applied) 3. Compute the controllable variance. Controllable Variance Controllable variance
