Question 2 Clarissa McWhirter, vice-president of Cyprus Company, was pleased to see a small variance on the income statement after the trouble the company had been having in controlling manufacturing costs. She noted that the $9,030 overall manufacturing variance reported last period was well below the 3% limit that had been set for variances. The company produces and sells a single product. The standard cost card for the product follows: Standard Cost Card - Per Unit Direct materials, 4 metres at $2.20 per metre Direct labour, 1.2 direct labour-hours at $8.0 per direct labour-hour Variable overhead, 1.2 direct labour-hours at $2.3 per direct labour-hour Fixed overhead, 1.2 direct labour-hours at $5 per direct labour-hour Standard cost per unit $ 27.16 $ 8.80 9.60 2.76 6.00 The following additional information is available for the year just completed: a. The company manufactured 17,000 units of product during the year. b. A total of 67,140 metres of material was purchased during the year at a cost of $2.50 per metre. All of this material was used to manufacture the 17,000 units. There were no beginning or ending inventories for the year. C. The company worked 21,100 direct labour-hours during the year at a cost of $7.60 per hour. d. Overhead cost is applied to products on the bases of standard direct labour-hours. Data relating to manufacturing overhead costs follow: Denominator activity level (direct labour-hours) 18,800 Budgeted fixed overhead costs (from the flexible budget) $ 94,000 Actual fixed overhead costs 92,150 Actual variable overhead costs $ 50,390 Required: 1. Compute the direct materials price and quantity variances for the year. 2. Compute the direct labour rate and efficiency variances for the year. 3. For manufacturing overhead, compute the following: a. The variable overhead spending and efficiency variances for the year. b. The fixed overhead budget and volume variance for the year. 4. Compute the total variance. $