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Brady Garden Products Inc. manufactures a variety of pots and holders for indoor and outdoor plants. One of the holders is 2 feet in length,

Brady Garden Products Inc. manufactures a variety of pots and holders for indoor and outdoor plants. One of the holders is 2 feet in length, and is meant to support the growth of heavy vines such as ornamental gourds. It is made of a fibrous fabric called Fibretuff, consisting of a mixture of cotton and polyethylene. The standard cost card for the holder displays the following information:

Direct materials, 4 metres of Fibretuff at $3.50 per metre

$ 14

Direct labour, 1.5 direct labour hours at $12 per direct labour hour

18

Variable manufacturing overhead, 1.5 direct labour hours at $2 per direct labour hour

3

Fixed manufacturing overhead, 1.5 direct labour hours at $6 per direct labour hour

9

Total standard cost per unit

$ 44

The following additional information is available for the year just completed:

  1. The company manufactured 20,000 units of the holder during the year .
  2. A total of 78,000 metres of Fibretuff was purchased during the year at a cost of $3.75 per metre. All of this material was used to manufacture the 20,000 units. There were no beginning or ending inventories of the holder for the year.
  3. The company worked 32,500 direct labour hours during the year at a cost of $11.80 per hour.
  4. Overhead cost is applied to products on the basis of standard direct labour hours. Data relating to manufacturing overhead costs follow:

Denominator activity level (direct labour hours)

25,000

Budgeted fixed overhead costs (from the flexible budget)

$150,000

Actual fixed overhead costs

$148,000

Actual variable overhead costs

$68,250

Required:

  1. Compute the direct materials price and quantity variances for the year.
  2. Compute the direct labour rate and efficiency variances for the year.
  3. Compute the variable overhead spending and efficiency variances for the year.

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