Clarissa McWhirter, vice-president of Cyprus Company, was pleased to see a small variance on the income statement after the trouble the company had been having in controlling manufacturing costs. She noted that the $12,270 overall manufacturing variance reported last period was well below the 3 % limit that had been set for varlances. The company produces and sells a single product. The standard cost card for the product follows: Standard Cost Card-Per Unit 11.60 Direct materials, 4 metres at $2.90 per metre Direct labour, 1.9 direct labour-hours at $11.5 per 21.85 direct labour-hour Variable overhead, 1.9 direct labour-hours at $3.0 per 5.70 direct labour-hour Fixed overhead, 1.9 direct labour-hours at $5 per 9.50 direct labour-hour 48.65 Standard cost per unit The following additional information is available for the year just completed: a. The company manufactured 24,000 units of product during the year. b. A total of 95,200 metres of materlal was purchased during the year at a cost of $3.00 per metre. All of this material was used to manufacture the 24,000 units. There were no beginning or ending inventories for the year. c. The company worked 47,000 direct labour-hours during the year at a cost of $11.20 per hour d. 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 45,400 hours) Budgeted fixed overhead costs (from the flexible budget) 227,000 225,500 Actual fixed overhead costs 142,370 Actual variable overhead costs Required: 1. Compute the direct materials price and quantity variances for the year. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Materials price variance Materials quantity variance 2. Compute the direct labour rate and efficiency varlances for the year. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance).) Labour rate variance Labour efficiency vaiance 3. For manufacturing overhead, compute the following: a. The varlable overhead spending and efficiency varlances for the year. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance).) Variable overhead spending variance Variable overhead efficiency variance b. The fixed overhead budget and volume variances for the year. (Indicate the effect of each variance by selecting "F for favorable, "U" for unfavorable, and "None" for no effect (1.e., zero variance).) Fixed overhead budget vaniance Fixed overhead yolume variance 4. Compute the total variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero varlance). Input all amounts as positive values.) Total variance
