Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 pounds @ $2.60 per pound) Direct labor (10 hours @$8.00 per DLH) Variable overhead (10 hours @ $4.48 per DLH) Fixed overhead (10 hours @ $2.00 per DLH) Standard cost per unit $ 52.00 80.00 44.00 20.00 $196.00 The $6.40 ($4.40 + $2.00) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,500 units, which is 75% of the factory's capacity of 54,000 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 overhead Total overhead Operating Levels (% of capacity) 78% 37,800 378,000 $ 1,663,200 810,000 $ 2,473,200 75% 80x 40,500 485,000 43,200 432,000 $1,900,800 810,000 $ 1,782,000 810,000 $ 2,592,000 $ 2,710,800 During the current month, the company operated at 70% of capacity, direct labor of 365,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead Actual total overhead $ 1,625,000 854,000 $ 2,479,000 Exercise 21-27A (Algo) Computing total variable and fixed overhead varlances LO P5 1. Compute the total variable overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no varlance. 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no varlance. Standard Direct Labor Hours Overhead Rate --At 70% of Operating Capacity------- Standard Direct Labor Hours Standard Overhead Applied Actual Overhead Overhead Varlance Variable overhead variance Fixed overhead variance S 4.40 2.00 854,000 Favorable or Unfavorable Camila Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (16 pounds @ $3 per pound) Direct labor (2 hours @ $14 per hour) $ 48 28 During June the company Incurred the following actual costs to produce 8,600 units. Direct materials (140,100 pounds @ $2.70 per pound) Direct labor (21,780 hours @ $14.15 per hour) AR = Actual Rate SR = Standard Rate AQ - Actual Quantity = SQ Standard Quantity AP = Actual Price SP = Standard Price (1) Compute the direct materials price and quantity variances. $ 378,270 307,055 (2) Compute the direct labor rate variance and the direct labor efficiency variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Actual Cost < Required 1 Required 2 > Standard Cost