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World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At this planned level, the company expects to use

World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At this planned level, the company expects to use 25,000 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.625 direct labor hours per unit. At the 80% capacity level, the total budgeted cost includes $50,000 fixed overhead cost and $275,000 variable overhead cost. In the current month, the company incurred $305,000 actual overhead and 22,000 actual labor hours while producing 35,000 units. (Do not round your intermediate calculations

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(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 35,000 units Standard DL Hours Overhead Actual Variance Fav./Unf. Costs Applied Results Variable overhead costs Fixed overhead costs Total overhead costs

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