Theoretical capacity for Cybertech Company is 80,000 direct labor hours, and normal capacity is 50,000 direct labor hours. The actual capacity attained for the fiscal year ended June 30, 20A, was 43,000 hours. It is estimated that 40,000 hours will be worked in 20B. Fixed factory overhead is $400,000, and variable factory overhead is $6.69 per direct labor hour.
Required:
(a) Using the normal capacity, compute (a) the factory overhead rate, and (b) the fixed part of the factory overhead rate.
(b) Using expected actual capacity for 20B, compute (a) the factory overhead rate, and (b) the fixed part of the factory overhead rate.