Jean Bob Wheel and Axel Inc. has an automated production process, and production activity is quantified in terms of machine hours. A standard-costing system is used. The annual static budget for 2019 called for 6,000 units to be produced, requiring 30, 000 machine hours. The standard overhead rate for the year computed using this planned level of production. The 2019 manufacturing cost report follows. Jean Bob Wheel and Axel Inc. Manufacturing Cost Report For 2019 (in thousands of dollars) Static Flexible Budget Budget 30,000 31, 000 32,000 Machine Machine Machine hours hours hours Cost item Actual cost $ 252.0 78.0 $260.4 80.6 $268.8 83.2 $270.0 83.0 273.0 234.0 282.1 241.8 291.2 249.6 287.0 250.0 Direct material: G27 aluminium M14 steel alloy Direct labour: Assembler Grinder Production overhead: Maintenance Supplies Supervision Inspection Insurance Depreciation Total costs 24.0 129.0 80.0 144.0 50.0 200.0 $1,464.0 24.8 133.3 82.0 147.0 50.0 200.0 $1, 502.0 25.6 25.0 137.6 130.0 84.0 81.0 150.0 147.0 50.0 50.0 200.0 200.0 $1,540.0 $1,523.0 Jean Bob develops flexible budgets for different levels of activity for use in evaluating performance. A total of 6, 200 units was produced during 2019, requiring 32, 000 machine hours. The preceding manufacturing cost repot compares the company's actual cost for the year with the static budget and the flexible budget for two different activity levels. Required: Compute the following amounts. For variances, indicate whether favourable or unfavourable where appropriate. Answers should be round to two decimal places when necessary. 1. The standard number of machine hours allowed to produce one unit of product. 2. The actual cost of direct material used in one unit of product. 3. The cost of material that should be processed per machine hour. 4. The standard direct-labour cost for each unit produced. 5. The variable-overhead rate per machine hour in a flexible-budget formula (use high- low method to estimate cost behaviour). MAF 200116- Spring, 2020 Group assignment Page 6 of 11 6. The standard fixed-overhead rate per machine hour used for product costing. 7. The variable-overhead spending variance. (Assume management has determined that the actual fixed-overhead cost in 2019 amounted to $324, 000.) 8. The variable -overhead efficiency variance. 9. The fixed-overhead budget variance. 10. The fixed-overhead volume variance [Make the same assumption as in requirement (7).] 11. The total budgeted manufacturing cost (in thousands of dollars) for an output of 6,050 units.) (Hints: use the flexible budget formula.)