The condensed form of Nordstrop Company's flexible budget for manufacturing overhead follows: Overhead Costs Variable cost Fixed cost Total overhead cost Cost Formula (per machine- hour) $1.30 Machine-Hours 7,000 8,000 9,000 $ 9,100 $10,400 $11,700 13,300 13,300 13,300 $ 22,400 $ 23,700 $25,000 The following information is available for a recent period: a. The denominator activity of 7,000 machine-hours was chosen to compute the predetermined overhead rate. b. At the 7,000 standard machine-hours level of activity, the company should produce 3,500 units of product. c. The company's actual operating results were as follows: 4 Number of units produced Actual machine-hours: Actual variable overhead costs) Actual fixed overhead costs 3,800 7,000 $ 9,700 $ 14,000