World Company expects to operate at 80% of its productive capacity of 29,000 units per month....

  

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World Company expects to operate at 80% of its productive capacity of 29,000 units per month. At this planned level, the company expects to use 12,180 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.525 direct labor hours per unit. At the 80% capacity level, the total budgeted cost includes $36,540 fixed overhead cost and $121,800 variable overhead cost. In the current month, the company incurred $169,165 actual overhead and 11,980 actual labor hours while producing 24,200 units. (Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.) (1) Compute the predetermined standard overhead rate for total overhead. (2) Compute the total overhead variance. World Company expects to operate at 80% of its productive capacity of 29,000 units per month. At this planned level, the company expects to use 12,180 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.525 direct labor hours per unit. At the 80% capacity level, the total budgeted cost includes $36,540 fixed overhead cost and $121,800 variable overhead cost. In the current month, the company incurred $169,165 actual overhead and 11,980 actual labor hours while producing 24,200 units. (Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.) (1) Compute the predetermined standard overhead rate for total overhead. (2) Compute the total overhead variance.

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Solution 1 Predetermined overhead rate Variable overhead rate 121800 12180 10 per labo... View the full answer