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Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation...

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Accounting

Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period.
Flexible Budget at 80% Capacity Actual Results
Production (in units)50,75045,200
Overhead
Variable overhead $ 279,125
Fixed overhead 50,750
Total overhead $ 329,875 $ 314,900
Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 25,375 DLH, computed as 50,750 units \times 0.5 DLH per unit.
Compute the standard overhead applied.
Compute the total overhead variance.

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