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! Required information (The following information applies to the questions displayed below.) Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 Ibs. @ $2.10 per Ib.) Direct labor (10 hrs. @ $8.80 per hr.) Variable overhead (10 hrs. @ $4.00 per hr.) Fixed overhead (10 hrs. @ $1.80 per hr.) Total standard cost $ 42.00 88.00 40.00 18.00 $188.00 The $5.80 ($4.00 + $1.80) total overhead rate per direct labor hour is based on an expected operating level equal to 70 of the factory's capacity of 70,000 units per month. The following monthly flexible budget information is also available. Operating Levels (# of capacity) Flexible Budget 65% 70% 758 Budgeted output (units) 45,500 49,000 52,500 Budgeted labor (standard hours) 455,000 490,000 525,000 Budgeted overhead (dollars) Variable overhead $1,820,000 $1,960,000 $2,100,000 Fixed overhead 882,000 882,000 882,000 Total overhead $2,702,000 $2,842,000 $2,982,000 During the current month, the company operated at 65% of capacity, employees worked 435,000 hours, and the following actual overhead costs were incurred. Variable overhead costs Fixed overhead costs Total overhead costs $1,765,000 943,000 $2,708,000 (1) Compute the predetermined overhead application rate per hour for total overhead, variable overhead, and fixed overhead. Predetermined OH Rate Variable overhead costs Fixed overhead costs Total overhead costs (2) Compute the total variable and total fixed overhead variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Rate per hour" answers to 2 decimal places.) --------At 65% of Operating Capacity------- Standard DL Overhead Costs Actual Results Variance Fav./Unf. Hours Applied Variable overhead costs Favorable Fixed overhead costs Favorable Total overhead costs Favorable

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