World Company expects to operate at 60% of its productive capacity of 32,000 units per month. At this planned level, the company expects to use 12,000 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.625 direct labor hour per unit. At the 60% capacity level, the total budgeted cost includes $36,000 fixed overhead cost and $120,000 variable overhead cost. In the current month, the company incurred $116,000 actual overhead and 5,760 actual labor hours while producing 9,400 units.

(1) Compute the predetermined standard overhead rate for total overhead. Predetermined OH rate Variable overhead costs Fixed overhead costs Total overhead costs (2) Compute the total overhead variance. Standard DL Hours -....-Actual production 9,400 units ------ Overhead costs Actual results Variance applied Fav./Unf. Variable overhead costs Fixed overhead costs Total overhead costs