[The following information applies to the questions displayed below.] Sedona Company set the following standard costs for one unit of its product for this year.

Direct material (15 Ibs. @ $3.40 per Ib.)		$	51.00
Direct labor (10 hrs. @ $9.70 per hr.)			97.00
Variable overhead (10 hrs. @ $4.90 per hr.)			49.00
Fixed overhead (10 hrs. @ $2.00 per hr.)			20.00
Total standard cost		$	217.00

The $6.90 ($4.90 + $2.00) total overhead rate per direct labor hour is based on an expected operating level equal to 70% of the factory's capacity of 59,000 units per month. The following monthly flexible budget information is also available.

		Operating Levels (% of capacity)
Flexible Budget			65%				70%				75%
Budgeted output (units)			38,350				41,300				44,250
Budgeted labor (standard hours)			383,500				413,000				442,500
Budgeted overhead (dollars)
Variable overhead		$	1,879,150			$	2,023,700			$	2,168,250
Fixed overhead			826,000				826,000				826,000
Total overhead		$	2,705,150			$	2,849,700			$	2,994,250

During the current month, the company operated at 65% of capacity, employees worked 365,000 hours, and the following actual overhead costs were incurred.

Variable overhead costs		$	1,816,000
Fixed overhead costs			899,050
Total overhead costs		$	2,715,050

(1) Compute the predetermined overhead application rate per hour for total overhead, variable overhead, and fixed overhead. Predetermined OH Rate Variable overhead costs $ 4.90 per DL hr. Fixed overhead costs 2.00 per DL hr. Total overhead costs $ 6.90 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 Standard DL Overhead Costs Actual Results Variance Fav./Unf. OH Rate Hours Applied Variable overhead costs $ 4.90 383,500 Fixed overhead costs 2.00 383,500 Total overhead costs $ 6.90