Question 1 Phillip Inc. produces and sells a single product. The company uses a standard cost system for control purposes and sets predetermined overhead rates based on direct labour hours. The company has set a production budget of 5,000 units and expects to incur $25,000 of variable manufacturing overhead cost. The standard cost for the product is as follows: Standard Cost Per Unit ($) Direct materials 3 metres at $4.40 per metre 13.20 Direct labour Manufacturing overhead 1 hour at $12 per hour 140% of direct labour cost 12.00 16.80 Total $42.00 During the year, the company actually produced 6,000 units of product and incurred the following costs: Materials purchased at $4.80 per metre Materials used in production Direct labour paid at $13 per hour Variable manufacturing overhead Fixed manufacturing overhead Required: $115,200 18,500 metre $75,400 $29,580 $60,400 (a) Present the standard cost card in a clearer format, segregating between variable overhead and fixed overhead cost. (3 marks) (b) Compute ALL the possible variances for the year based on the information given. (13 marks) (c) Write journal entries to record ALL variances computed in (b) above (narrations are not required). (10 marks)