a. Variable component of the predetermined overhead rate (Standard rate) = $45,450/45,000 machine-hours
= $1.01 per machine-hour
Variable overhead rate variance = (Actual hours × Actual rate) − (Actual hours × Standard rate)
= ($68,110) − (49,000 machine-hours × $1.01 per machine-hour)
= ($68,110) − ($49,490)
= $18,620 Unfavorable
b. Labor efficiency variance = (Actual hours − Standard hours) × Standard rate
= (49,000 machine-hours − 51,000 machine-hours) × $1.01 per machine-hour
= (−2,000 machine-hours) − $1.01 per machine-hour
= $2,020 Favorable
c. Budget variance = Actual fixed overhead − Budgeted fixed overhead
= $255,050 − $265,050 = $10,000 Favorable
d. Fixed component of the predetermined overhead rate = $265,050/45,000 machine-hours
= $5.89 per machine-hour
Volume variance = Budgeted fixed overhead − Fixed overhead applied to work in process
= $265,050 − ($5.89 per machine-hour × 51,000 machine-hours)
= $265,050 − ($300,390)
= $35,340 Favorable
e. Predetermined overhead rate = $310,500/45,000 machine-hours = $6.90 per machine-hour