3 "Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well," said Kim Clark, president of Martell Company. "Our $63,400 overall manufacturing cost variance is only 2.0% of the $3,170,000 standard cost of products made during the year. That's well within the 3% parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year." 5 points The company produces and sells a single product. The standard cost card for the product follows: eBook Inputs Direct materials Direct labor Variable overhead Fixed overhead Total standard cost per unit (1) Standard Quantity or Hours 5.00 feet 2.4 hours 2.4 hours 2.4 hours (2) Standard Price or Rate $ 3.50 per foot $ 15 per hour $ 1.50 per hour $ 7.50 per hour Standard Cost (1) X (2) $ 17.50 36.00 3.60 18.00 $ 75.10 The following additional information is available for the year just completed: a. The company manufactured 30,000 units of product during the year. b. A total of 147,000 feet of material was purchased during the year at a cost of $3.70 per foot. All of this material was used to manufacture the 30,000 units produced. There were no beginning or ending inventories for the year. c. The company worked 75,000 direct labor-hours during the year at a direct labor cost of $14.80 per hour. verhead is applied to products on the basis of standard dire labor-hours. relating to manufacturing overhead Denominator activity level (direct labor-hours) Budgeted fixed overhead costs Actual variable overhead costs incurred Actual fixed overhead costs incurred 70,000 $ 525,000 $ 120,000 $ 521,500 II. 3 5 points Denominator activity level (direct labor-hours) Budgeted fixed overhead costs Actual variable overhead costs incurred Actual fixed overhead costs incurred 70,000 $ 525,000 $ 120,000 $ 521,500 eBook Required: 1. Compute the materials price and quantity variances for the year. 2. Compute the labor rate and efficiency variances for the year. 3. For manufacturing overhead compute: a. The variable overhead rate and efficiency variances for the year. b. The fixed overhead budget and volume variances for the year. (For all requirements, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) 1. Materials price variance Materials quantity variance 2. Labor rate variance Labor efficiency variance 3a. Variable overhead rate variance Variable overhead efficiency variance 3b. Fixed overhead budget variance Fixed overhead volume variance