Landor Company uses a standard cost system and sets predetermined overhead rates based on direct labor-hours. The following data are taken from the company's budget for the current year: 5,000 Denominator activity (direct labor-hours). Variable manufacturing overhead cost Fixed manufacturing overhead cost... $25,000 $59,000 The standard cost card for the company's only product is given below: Direct materials, 3 yards at $4.40 per yard Direct labor, 1 hour at $12 per hour Manufacturing overhead, 140% of direct labor cost. Standard cost per unit... $13.20 12.00 16.80 $42.00 During the year, the company produced 6,000 units of product and incurred the following costs: Materials purchased, 24,000 yards at $4.50 per yard. Materials used in production (in yards) Direct labor cost incurred, 5,800 hours at $13 per hour Variable manufacturing overhead cost incurred Fixed manufacturing overhead cost incurred. $115.200 18,500 $75,400 $29,580 $60,400 Required: i. What are the direct material variances? 2. What are the direct labor variances? 3. What are the variable overhead variances? 1. The following standards for variable overhead have been established for a company that makes only one product: Standard hours per unit of output... Standard variable overhead rate... 6.9 hours $15.80 per hour The following data pertain to operations for the last month: Actual hours Actual total variable overhead cost.. Actual output... 6.100 hours $97.600 800 units Required: Based upon the data above are the overhead variances favorable or unfavorable? 2. What is the spending variance and how might it be used by management? (4pts) 3. During a recent lengthy strike at Morell Manufacturing Company, management replaced striking assembly line workers with office workers. The assembly line workers had been paid $18 per hour while the office workers are only paid $10 per hour. What is the most likely effect on the labor variances in the first month of this strike? (4 pts)