Problem #2 Standard-Costing The Sanibel Corporation produces an industrial chemical. They use a standard cost system and apply MOH based on DLH. At the beginning of 2007, the company had the following information: Expected Overhead - Variable $108,000 Expected Overhead - Fixed $216,000 DM per Unit 10 Pounds Cost of DM $1.60 Per Pound DLH per Unit 0.75 DLH Cost of DL $18.00 Per DLH Expected production 72,000 Units Actual Information for 2007 was as follows: Actual production 70,000 Units Quantity of DM purchased 744,000 Pounds Cost of DM $1.50 Per Pound DM used in production 736,000 Pounds Actual DLH 56,000 DLH Cost of DL $1,002,400 Actual Fixed Overhead $214,000 Actual Variable Overhead $175,400 Part 2: Static and Flexible Budget Prepare a Static Budget and a Flexible Budget for 2007. Actual Static Budget (a Budget Flexible Budget (a budget for (Just actual numbers) for Budgeted units actual units Volume (units) Direct materials Direct labor Variable overhead Fixed overhead Total Part 1: Standard Costing Variances: DM What is the DM Price variance?Part 2: Static and Flexible Budget Prepare a Static Budget and a Flexible Budget for 2005, Actual Static Budget Flexible Budget Volume (units) Direct materials Direct labor Variable overhead Fixed overhead TotalWhat is the DM Usage variance? What is applied DM? DL What is the DL Rate Variance? What is the DL Efficiency Variance? What is applied DL? Variable MOH What is the variable overhead spending variance? What is the variable overhead efficiency variance? What is applied variable OH? Fixed OH What is the fixed overhead spending variance? What is the fixed overhead volume variance? What is applied fixed OH