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11. Baird Company makes classic Polish sausage. The company uses a standard cost system to help control costs. Manufacturing overhead is applied to production on the basis of standard direct labor-hours. According to the companys planning budget, the following manufacturing overhead costs should be incurred at an activity level of 15,000 labor-hours (the denominator activity level):

Variable manufacturing overhead cost	$ 30,000
Fixed manufacturing overhead cost	60,000
Total manufacturing overhead cost	$ 90,000

During the most recent year, the following operating results were recorded:

Activity:
Actual labor-hours worked	12,000
Standard labor-hours allowed for the actual output	12,300
Cost:
Actual variable manufacturing overhead cost incurred	$ 34,800
Actual fixed manufacturing overhead cost incurred	$ 48,750

At the end of the year, the companys Manufacturing Overhead account contained the following data:

Manufacturing Overhead
Debit		Credit
Actual	83,550	Applied	73,800
	9,750

Management would like to determine the cause of the $9,750 underapplied overhead.

Required:

3. Break down the $9,750 underapplied overhead into four components: (1) variable overhead rate variance, (2) variable overhead efficiency variance, (3) fixed overhead budget variance, and (4) fixed overhead volume variance.

At the end of the year, the company's Monufacturing Overhesd account contained the following dsta: Management would like to determine the cause of the $9750 underapplied overhead. Required: 1. Compute the predetermined overhead rate. Break the rate down into variable and fored cost elements. 2. Show how the $73,800 Applied figure in the Manufacturing Overhead account was computed 3. Break down the $9,750 underapplied overhead into four components: (1) variable owechead rate variance. (2) variabie overhead efficiency variance, (3) fived overthead budget variance, and (4) fixed overhead volume variance Complete this question by entering your answer below. Break down the $9,750 underapplied overhead into foi variable overhead rate variance, (2) variable overhead (3) fixed overhead budget variance; and (4) fixed over variance. (Indicate the effect of each variance by selec favorable, "U" for unfavorable, and "None" for no effec variance). Input all amounts as positive values.)

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