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Use the following information for the Exercises below. [The following information applies to the questions displayed below] Sedona Company set the following standard costs for one unit of its product for 2017 Direct material (30 lbs. $2.50 per lb.) Direct labor (20 hrs. @ $4.80 per hr.) Factory variable overhead (20 hrs. @ $2.30 per hr.) Factory fixed overhead (20 hrs.@ $1.20 per hr.) $ 75.00 96.00 46.00 24.00 $241.00 Standard cost The $3.50 ($2.30 $1.20) total overhead rate per direct labor hour is based on an expected operating level equal to 70% of the factory's capacity of 53,000 units per month. The following monthly flexible budget information is also available Operating Levels (% of capacity) Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) 65% 70% 75% 34,450 689,000 37,100 39,750 742,000 795,000 $1,584,700 $1,706,600 $1,828,500 Variable overhead Fixed overhead 890,400 890.400 890.400 $2,475,100 $2,597,000 $2,718,900 Total overhead During the current month, the company operated at 65% of capacity, employees worked 652,000 hours, and the following actual overhead costs were incurred. $1,525,000 954,000 Variable overhead costs Fixed overhead costs $2,479,000 Total overhead costs AH Actual Hours SH Standard Hours AVR Actual Variable Rate SVR Standard Variable Rate SFR Standard Fixed Rate Exercise 21-17 Computation of total variable and fixed overhead variances LO P3 (1) Compute the predetermined overhead application rate per hour for variable overhead, fixed overhead, and total overhead at 70% of capacity 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. At 65% of Operating Capacity- Actual Overhead Costs Applied Standard DL Hours Variance Fav./Unf. Results Variable overhead costs Fixed overhead costs Total overhead costs

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