Overhead application rate (similar to Self-Study Problem 2) Cajun Manufacturing Inc. us...

Overhead application rate (similar to Self-Study Problem 2)

Cajun Manufacturing Inc. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows:

The standards are based on normal capacity of 2,400 direct labor hours. Actual activity for October follows:

Materials purchased, 18,000 yards @ $0.92 per yard $16,560

Materials used, 9,500 yards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Direct labor, 2,100 hours @ $9.15 per hour . . . . . . . . . . . . . . 19,215

Total factory overhead, 500 units actually produced . . . . . 17,760

Required:

1. Compute the variable and fixed factory overhead rates per unit.

2. Compute the variable and fixed overhead rates per direct labor hour.

3. Determine the total fixed factory overhead based on normal capacity.