7.400 Applied 272.000 15,400 like to determine the cause of the $15,400underapplied ethe predetermined overhead rate. Break the rate down imo variable and fised cost how the $272.000 Applied figure in the Manufacturing Overhead account was overhead putedhe $15,400 underapplied overhead into four components: (1) variable overhc greakanance. (2) variable overhcad efficiency variance, (3) fixed overhead badget varianse a fixed overhead volume variance 4 Explain d n the meaning of each variance that you computed in (3) abeove. PROBLEM 104 nef OA-10 Comprehensive Standard Cost Variances Lo10-1, L010-2, L010-3, LO10-4 felt Not only did our salespeople do a good job in meeting the sales budget this ye Monderoduction people did a good job in controling costs as well. saild Kim Cia bol f Martell Company. " "Our $18,300 overall manufacturing cost variance is .00 standi cost of , only 1.2% of the roducts made during the year. That's well within the 3% parameter everyone will be in line for a bonas t for acceptable variances. It looks like everyone will be n tbis The company produces and sells a single prodact. The standard cost card for the product set by Standard Quantity or Hours Standard Price or Rate Standard Cost Inputs Direct materials Direct labor Variable overheadd Fixed overhead Total standard cost per unit 2 feet $8.45 per foot $16.90 ...1.4 hours $16 per hour 22.40 ....1.4 hours $2.50 per hour 3.50 8.40 1.4 hours $6 per hour $51.20 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 64,000 feet of material was purchased during the year at a cost of $8.55 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 43.500 direct labor-hours during the year at a direct labor cost of $15.80 per hour Overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow: d. 35,000 $210,000 Actual variable overhead costs incurred...... Actual fixed overhead costs incurred $108,000 $211,800 Required: I. Compute the materials price and quantity variances for the year. 2. Compute the labor rate and efficiency variances for the year Chapter 10 3. For manufacturing overhead compute: The variable overhead rate and efficiency variances for the year. a. b. The fixed overhead budget and volume variances for the year. 4. Total the variances you have computed, and compare the net amount with the $18.300 tioned by the president. Do you agree that bonuses should be given to everyone for control during the year? Explain. men- for good cos