Glandorf Controls produces furnaces at several plants.The business is seasonal and cyclical in nature.The accountant for the Marion plant uses flexible budgeting to help the plant management control operations.Data for Marion follows:

Budget data for the year:Normal monthly capacity of the plant in direct labor hours30,000 hours

Materials costs (40 lbs. @ $2.00)$80.00/unit

Labor costs (5 hours @ $15.00)$75.00/unit

Overhead estimate at normal monthly capacity:Variable:Indirectlabor$68,000

Indirectmaterials6,000

Repairs7,000

Totalvariable$81,000

Fixed:Depreciation$50,000

Supervision40,000

Totalfixed$90,000

Total fixed and variable$171,000

Actual data for January:Units produced6,300

Costs incurredMaterials(250,000 lbs.)$537,000

Directlabor484,000

Indirectlabor72,000

Indirectmaterials6,200

Repairs8,800

Depreciation50,000

Supervision43,000

Total$1,201,000

a.Compute the fixed and variable factory overhead application rates per unit of production.b.Assuming Glandorf uses the two-variance method of analyzing factory overhead, compute the two overhead variances.c.Prepare a flexible budget performance report for January comparing actual and budgeted costs of all cost elements for the actual activity for the month.d.Prove the factory overhead budget variance from the above report.