Hi,

I need some guidance answering questions 1-3 posted below regarding this problem.

Thank you!

PROBLEM 9A-10 Comprehensive Standard Cost Variances L69-4,L69-5, L69-6, L09-7 Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our pro. duction 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 made during the year. That's well within the 3% parameter set by management for acceptable varian looks like everyone will be in line for a bonus this year." standard cost of products ces. It The company produces and sells a single product. The standard cost card for the product follows: Standard Cost Standard Price or Rate Standard Quantity or Hours 2 feet 1.4 hours 1.4 hours 1.4 hours Inputs $8.45 per foot $16 per hour $2.50 per hour $6 per hour $16.90 22.40 3.50 8.40 $51.20 Direct labor Variable overhead . . Total standard cost per unit . Flexible Budgets, Standard Costs, and Variance Analysis The following additional information is available for the year just completed: The company manufactured 30,000 units of product during the year. 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. b. 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: ...$210,000 Budgeted fixed overhead costs Actual variable overhead costs incurred................ Actual fixed overhead costs incurred . $108,000 .$211,800 Explanation of possible reasons for the materials, labor, variable, and fixed overhead variances Your comparison of the net variance amount with the $18,300 mentioned in the problem by the president. Whether or not you agree that bonuses should be given to everyone for good cost control during the year. Why or why not? 1. 2. 3