Reference no: EM132053399

Question - World Company expects to operate at 70% of its productive capacity of 21,000 units per month. At this planned level, the company expects to use 14,700 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate based on direct labor hours. At the 70% capacity level, the total budgeted cost includes $44,100 fixed overhead cost and $279,300 variable overhead cost. In the current month, the company incurred $600,800 actual overhead and 14,400 actual labor hours while producing 26,900 units. (Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.)

a. Compute the overhead application rate for total overhead.

1. Variable overhead cost

2. Fixed overhead cost

3. Total overhead cost

b. Compute the total overhead variance.

1. Cariable overhead cost

2. Fixed overhead cost

3. Total overhead cost