Computing total variable and fixed overhead variances P5 Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 lbs. $2.50 per lb.)...... Direct labor (10 hrs. $22.00 per DLH). Variable overhead (10 hrs. $4.00 per DLH)..... Fixed overhead (10 hrs. $1.60 por DLH) Standard cost per unit.. $50 220 40 16 $326 The $5.60 ($4.00 + $1.60) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 37,500 units, which is 75% of the factory's capacity of 50,000 units per month. The following monthly flexible budget information is available. Flexible Budget at Capacity Level of Flexible Budget Budgeted production (units)... 70% 75% 35,000 37,500 Budgeted direct labor (standard hours).. 350,000 375,000 400,000 Budgeted overhead Variable overhead. $1,400,000 $1,500,000 $1,600,000 600,000 600.000 Fored overhead Total overhead.. $2,000,000 $2,100,000 600,000 $2,200,000 During the current month, the company operated at 70% of capacity, direct labor of 340,000 hours were used, and the following actual overhead costs were incurred. Actual overhead Variable overhead. Fixed overhead.. Total overhead. 70% of Capacity $1,375,000 628,600 $2,003,600 1. Compute the total variable overhead variance, and identify it as favorable or unfavorable. 2. Compute the total fixed overhead variance, and identify it as favorable or unfavorable. Dare 887