Question
World Company expects to operate at 60% of its productive capacity of 19,000 units per month. At this planned level, the company expects to use
World Company expects to operate at 60% of its productive capacity of 19,000 units per month. At this planned level, the company expects to use 4,845 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.425 direct labor hour per unit. At the 60% capacity level, the total budgeted cost includes $19,380 fixed overhead cost and $92,055 variable overhead cost. In the current month, the company incurred $87,020 actual overhead and 875 actual labor hours while producing 1,800 units. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.)
1) Compute the predetermined standard overhrad rate for total overhead
variable overhead costs
Fixed overhead costs
Total overhead costs
2) Compute the total overhead variance
variable overhead costs
Fixed overhead costs
Total overhead costs
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