Response to the following problem:
Lynwood Company produces surge protectors. To help control costs, Lynwood employs a standard costing system and uses a flexible budget to predict overhead costs at various levels of activity. For the most recent year, Lynwood used a standard overhead rate of $18 per direct labor hour. The rate was computed using practical activity. Budgeted overhead costs are $396,000 for 18,000 direct labor hours and $540,000 for 30,000 direct labor hours. During the past year, Lynwood generated the following data:
a. Actual production: 100,000 units
b. Fixed overhead volume variance: $20,000 U
c. Variable overhead efficiency variance: $18,000 F
d. Actual fixed overhead costs: $200,000
e. Actual variable overhead costs: $310,000
Required:
1. Calculate the fixed overhead rate.
2. Determine the fixed overhead spending variance.
3. Determine the variable overhead spending variance.
4. Determine the standard hours allowed per unit of product.