Creole Manufacturing inc…

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Overhead Application Rate Creole Manufacturing Inc. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows: Materials, 20 yards @ $0.90 per yard $18Direct labor, 4 hours @ $9.00 per hour………………. 36Total factory overhead per unit (the ratio of variable costs to fixed costs isato 1) __3:_2_Total unitcost ……………………………………… g The standards are based on normal capacity of 2,400 direct labor hours. Actual activity for October follows: Materials purchased. 18,000 yards @ $0.92 per yard Materials used, 9,500 yards …………………………. $18,560Direct labor, 2,100 hours @ $9.15 per hour ……… 19,215Total factory overhead, 500 units actually produced ….. 17,760Required: 1. Compute the variable and fixed factory overhead rates per unit. Variable Factory Overhead Rate $3 per unit Fixed Factory Overhead Rate $ per unit 2. Compute the variable and fixed overhead rates per direct labor hour. Variable Factory Overhead Rate $./ per hour Fixed Factory Overhead Rate $ per hour 3. Determine the total fixed factory overhead based on normal capacity. $5