Reference no: EM132712515

Question - World Company Expects to operate at 90% of it productive capacity of 17,000 units per month. At 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. 

Required -

1. Compute the predetermined standard overhead rate for total overhead.

2. Compute the total overhead variance.