# Question: Sedona Company set the following standard costs for one unit

Sedona Company set the following standard costs for one unit of its product for 2013.
Direct material (20 Ibs. @ \$ 2.50 per Ib.) . . . . . . . . . . . . . . . . . . . \$ 50.00
Direct labor (10 hrs. @ \$ 8.00 per hr.) . . . . . . . . . . . . . . . . . . . . . 80.00
Factory variable overhead (10 hrs. @ \$ 4.00 per hr.) . . . . . . . . . . 40.00
Factory fixed overhead (10 hrs. @ \$ 1.60 per hr.) . . . . . . . . . . . . 16.00
Standard cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$ 186.00
The \$ 5.60 (\$ 4.00 + \$ 1.60) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory’s capacity of 50,000 units per month. The following monthly flexible budget information is also available.
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During the current month, the company operated at 70% of capacity, employees worked 340,000 hours, and the following actual overhead costs were incurred.
Variable overhead costs . . . . . . . . \$ 1,375,000
Fixed overhead costs . . . . . . . . . . 628,600
Total overhead costs . . . . . . . . . . . \$ 2,003,600