Reference no: EM132670841

World Company Expects to operate at 90% of it productive capacity of 17,000 units per month. At it planned level, the company expects to use 13.770 standard hours of direct labor. Overhead is allocated to using a predetermined standard rate of 0.900 direct labor hours per unit. At 90% capacity level, the total budgeted cost includes $27,540 fixed overhead cost and $192780 variable overhead cost. In the current month the company incurred $302,020 actual overhead and 13,460 actual labor hours while producing 20,800 units.

Problem 1: compute the predetermined standard overhead rate for total overhead

Problem 2: compute the total overhead variance.