Direct material (15 pounds @ $4.20 per pound) Direct labor (10 hours @ $6.40 per DLH) variable overhead (10 hours @ $3.70 per DLH) Fixed overhead (10 hours @ $1.50 per DLH) Standard cost per unit $ 63.00 64.00 37.08 15.00 $179.00 The $5.20 ($3.70+ $1.50) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 43,550 units, which is 65% of the factory's capacity of 67,000 units per month. The following monthly flexible budget Information is available. Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead variable overhead Fixed overheadi Total overhead Operating Levels (% of capacity) 60% 40,200 402,000 $ 1,487,400 653,250 $ 2,140,650 65% 43,550 435,500 $1,611,350 653,250 $ 2,264,600 70% 46,900 469,000 $ 1,735,300 653,250 $ 2,388,550 During the current month, the company operated at 60% of capacity, direct labor of 382.000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead Actual total overhead $ 1,425,000 725,250 $2,150,250 Exercise 21-27A (Algo) Computing total variable and fixed overhead variances LO P5 1. Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the varlance by selecting favorable, unfavorable, or no variance.) 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no varlance.) At 60% of Operating Capacity- Standard Direct Labor Hours Overhead Rate Favorable/Unfavorable Standard Direct Labor Hours Standard Overhead Applied Actual Overhead Overhead Variance Variable overhead variance $ Fixed overhead variance 3.70 1.50 725,250