Question

5 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 2017. Part 1 of2 Direct material (30 Tbs. $2.20 per Ib.) Direct labor (20 hrs. $4.20 per hr.) Factory variable overhead (20 hrs. $2.20 per hr.) Factory fixed overhead (20 hrs. $1.10 per hr.) Standard cost 66.00 84.00 44.00 22.00 $216.00 8.33 points Skipped The $3.30 ($2.20 + $1.10) total overhead rate per direct labor hour is based on an expected operating level equal to 60% of the factory's capacity of 68,000 units per month. The following monthly flexible budget information is also available eBook Operating Levels of capacity) 60% 40, 800 Flexible Budget Budgeted output 《units) Budgeted labor (standard hours) Budgeted overhead (dollars) 65 37,400 748,000 44,200 884,000 Hint 816,000 Variable overhead Fixed overhead Total overhead $1,645,600 $1,795,200 $1,944,800 897,600 $2,543,200 $2,692,800 $2,842,400 897, 600 897,600 Print References During the current month, the company operated at 55% of capacity, employees worked 728,000 hours, and the following actual overhead costs were incurred Variable overhead costs Fixed overhead costs Total overhead costs s1, 625,000 924,300 $2,549,300 AH Actual Hours SH Standard Hours AVR Actual Variable Rate SVR Standard Variable Rate SFR Standard Fixed Rate

Answer 1

Solution 1:

Predetermined overhead rate for variable overhead = $2.20 Per hour

Fixed overhead rate = $1.10 per hour

Total overhead rate = $2.20 + $1.10 = $3.30 per hour

Solution 2:

		At 55% of Operating Capacity
Particulars	Standard DL hours	Overhead Cost Applied	Actual results	Variance	Fav./Unfav.
Variable overhead costs	748000	$1,645,600.00	$1,625,000.00	$20,600.00	Favorable
Fixed overhead costs	748000	$822,800.00	$924,300.00	$101,500.00	Unfavorable
Total overhead costs		$2,468,400.00	$2,549,300.00	$80,900.00	Unfavorable