Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report L.O. P1, P2, P3, C2
[The following information applies to the questions displayed below.]
Kwikeze Company set the following standard costs for one unit of its product.
The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% level.
Overhead Budget (75% Capacity)
The company incurred the following actual costs when it operated at 75% of capacity in October.