Example 6: Comprehensive Swift Company manufactures a single product. Standard cost data for the product follow: (1) (2) (3) Standard Standard Standard Quantity Price Cost per unit (1)x) Direct materials 3.5 feet S12 per foot $42 Direct labor.. 2.0 hours $16 $32 per hour Swift built up its long term production capacity to produce up to 10,000 units of output per period. Overhead is assigned to the product on the basis of direct labor hours. At the beginning of 2006, Swift Company expects to produce 7,500 units. Thus the denominator activity level is 15.000 DLH.(i.e., the company will operate at 7,500 units of output, which is equivalent to 15,000 DLH level of Activity). Budgeted Variable and Fixed Overhead are $75,000 and $300,000; respectively. Actual results of operations are summarized below: Number of units completed. 8,000 units Actual DM (4 feet per unit @ $10 per feet)... $320.000 Actual direct labor hours. 18,000 DLHS Actual total direct labor costs. $252,000 Actual manufacturing overhead cost: Variable Fixed Total $81,000 305.000 $386,000 Required: Compute all the variances related to production activities during 2006. (AQ XAR) (AQ x SP) (SQ x SP) DM Price Var. Efficiency Var. Flexible Budget