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World Company expects to operate at 70% of its productive capacity of 21,000 units per month. At this planned level, the company expects to use
World Company expects to operate at 70% of its productive capacity of 21,000 units per month. At this planned level, the company expects to use 14,700 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 1.000 direct labor hours per unit. At the 70% capacity level, the total budgeted cost includes $44,100 fixed overhead cost and $279,300 variable overhead cost. In the current month, the company incurred $600,800 actual overhead and 14,400 actual labor hours while producing 26,900 units. (Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.) |(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. -Actual production 26,900 units - Standard DL Hours Overhead costs applied Actual results Variance Fav./Unf. Variable overhead costs Fixed overhead costs Total overhead costs
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