Comprehensive Standard Cost Variances Not only did our salespeople do a good job in meeting the sales budget this year, but out production people did a good job in controlling costs as well, said Kim Clark, president of Martell Company. Our $18,300 overall manufacturing cost variance is only 1.2% of the $1,536,000 standard cost of products made during the year. Thats well within the 3% parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year. The company produces and sells a single product. The standard cost card for the product follows: Standard Cost per Unit of Product: Direct materials, 2 feet at $8.45 per foot Direct labor, 1.4 direct labor hours at $16 per direct labor-hour Variable overhead, 1.4 direct labor-hours at $2.5 per direct labor-hour Fixed overhead, 1.4 direct labor-hours at $6 per direct labor-hour The following 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 $547,200. All of this material was used to manufacture the 30,000 units. There was 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. Variable and Fixed overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs are as follows: Budgeted fixed overhead costs..$210,000 Actual variable overhead costs incurred$108,000 Actual fixed overhead costs incurred.$211,800 Assume no beginning or ending inventory. Label Each variance below as Favorable or Unfavorable. 1. Compute the standard cost per unit of one product 2. Compute the Direct Material Price and Usage Variances 3. Compute the Direct Labor Spending and Efficiency Variances 4. Compute the Variable Overhead Spending and Efficiency Variances for the year. 5. Compute the Fixed Overhead Spending Variance for the year. 6. Compute Budgeted Units of Production 7. Compute the Production Volume Variance for the year. 8. Total the variances and compare the net amount with the $18,300 mentioned by the president. Do you agree that bonuses should be given to everyone for good cost control during the year? Explain