Exercise 23-17 Computing total variable and fixed overhead variances P4 Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 lbs. @ $2.50 per lb.). $50 Direct labor (10 hrs. @ $22.00 per hr.).. Variable overhead (10 hrs. a $4.00 per hr.) Fixed overhead (10 hrs. @ $1.60 per hr.). Total standard cost $326 220 40 16 The $5.60 ($4.00 + $1.60) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory's capacity of 50,000 units per month. The following monthly flexible budget information is also available. Operating Levels (% of capacity) 70% 75% 35.000 37,500 350,000 375,000 80% 40,000 400.000 Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) Variable overhead Fixed overhead Total overhead $1,400,000 600,000 $2,000,000 $1,500,000 600,000 $2.100,000 $1,600,000 600,000 $2,200,000 During the current month, the company operated at 70% of capacity, employees worked 340,000 hours, and the following actual overhead costs were incurred. Variable overhead costs $1,375,000 Fixed overhead costs Total overhead costs $2.003.600 628,600 1. Compute the predetermined overhead application rate per hour for total overhead, variable overhead, and fixed overhead. 2. Compute the total variable and total fixed overhead variances and classify each as favorable or unfavorable