Problem 8A-10A Comprehensive Standard Cost Variances [LO8-4, LO8-5, LO8-6, LO8-7 Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as wel," said Kim Clark, president of Martell Company "Our $11,050 overall manufacturing cost variance is only 2% of the $741,000 standard cost of products made during the year. That's well within the 3% parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year." The company produces and sells a single product. The standard cost card for the product follows: Standard Cost Card-per Unit Direct materials, 4.50 feet at $3.80 per foot Direct labor, 1.7 direct labor-hours at $11 per direct labor-hour Variable overhead, 1.7 direct labor-hours at $2.50 per direct labor-hour Fixed overhead, 1.7 direct labor-hours at $5.50 per direct labor-hour $17.10 18.70 4.25 9.35 $ 49.40 Standard cost per unit The following additional information is available for the year just completed a. The company manufactured 15,000 units of product during the year. b. A total of 65,000 feet of material was purchased during the year at a cost of $4.00 per foot. All of this material was used to manufacture the 15,000 units. There were no beginning or ending inventories for the year. c. The company worked 28,000 direct labor-hours during the year at a direct labor cost of $10.70 per hour d. Overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow Denominator activity level (direct labor-hours) Budgeted fixed overhead costs Actual variable overhead costs incurred Actual fixed overhead costs incurred 23,000 $126,500 $72,800 $124,000 Required: 1. Compute the materials price and quantity variances for the year. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Materials price variance Materials quantity variance 2. Compute the labor rate and efficiency variances for the year. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Labor rate variance Labor efficiency variance