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Scott Companys variable manufacturing overhead should be $2.40 per standard direct labor-hour and fixed manufacturing overhead should be $408,900 per year.

The company produces a single product that requires 2.6 direct labor-hours to complete. The direct labor wage rate is $20 per hour. Three yards of raw material are required for each unit of product, at a cost of $4 per yard.

Demand for the companys product differs widely from year to year. Expected activity for this year is 57,000 direct labor-hours; normal activity is 47,000 direct labor-hours per year.

Required:
1.	Assume that the company chooses 47,000 direct labor-hours as the denominator level of activity. Compute the predetermined overhead rate, breaking it down into fixed and variable cost components. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)

Variable predetermined overhead rate	$
Fixed predetermined overhead rate
Total predetermined overhead rate	$

2.	Assume that the company chooses 57,000 direct labor-hours as the denominator level of activity. Repeat the computations in (1) above. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)

Variable predetermined overhead rate	$
Fixed predetermined overhead rate
Total predetermined overhead rate	$

3.	Complete two standard cost cards as outlined below. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)

Denominator Activity: 47,000 DLHs
Direct materials, 3 yards at $4.00 per yard	$12.00
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Total standard cost per unit	$

Denominator Activity: 57,000 DLHs
Direct materials, 3 yards at $4.00 per yard	$12.00
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Total standard cost per unit	$

4.	Assume that 48,500 actual hours are worked during the year, and that 19,100 units are produced. Actual manufacturing overhead costs for the year are as follows:

Variable manufacturing overhead cost	$ 121,250
Fixed manufacturing overhead cost	394,226
Total manufacturing overhead cost	$ 515,476

a.	Compute the standard hours allowed for the years actual output. (Do not round intermediate calculations.)

Standard hours

b.

Compute the missing items from the Manufacturing Overhead account below. Assume that the company uses 47,000 direct labor-hours (normal activity) as the denominator activity figure in computing overhead rates, as you have used in (1) above. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Manufacturing Overhead

Actual costs	515,476		Applied costs
			Overapplied overhead

c.

Analyze your underapplied or overapplied overhead balance in terms of variable overhead rate and efficiency variances and fixed overhead budget and volume variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations.Omit the "$" sign in your response.)

Variable overhead rate variance	$	(Click to select)UNoneF
Variable overhead efficiency variance		(Click to select)UNoneF
Fixed overhead budget variance		(Click to select)UFNone
Fixed overhead volume variance		(Click to select)FNoneU
(Click to select)OverappliedUnderapplied overhead	$	(Click to select)NoneFU

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