Question
World Company expects to operate at 90% of its productive capacity of 13,000 units per month. At this planned level, the company expects to use
World Company expects to operate at 90% of its productive capacity of 13,000 units per month. At this planned level, the company expects to use 11,115 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.950 direct labor hours per unit. At the 90% capacity level, the total budgeted cost includes $22,230 fixed overhead cost and $111,150 variable overhead cost. In the current month, the company incurred $203,300 actual overhead and 10,875 actual labor hours while producing 17,000 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 17,000 units - Standard Overhead DL Hours costs applied Actual results Variance Fav./Unf. Variable overhead costs Fixed overhead costs Total overhead costs
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