Standard Costs and Variances DROBLEM 12A-8 Comprehensive Standard Cost Variances [L01, LO2, LO3, L04] dro Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company's budget for the current year: 29 ,000 /s 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 . . .. . .. .$13.20 Manufacturing overhead, 140% of direct labor cost . . . . . . . . Standard cost per unit 16.80 .. $42.00 During the year, the company produced 6,000 units of product and incurred the following costs: 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 18,500 $75,400 $60,400 Required: 1. Redo the standard cost card in a clearer, more usable format by detailing the variable and fixed overhead cost elements. Prepare an analysis of the variances for direct materials and direct labor for the year. Prepare an analysis of the variances for variable and fixed overhead What effect, if any, does the choice of a denominator activity level have on unit standard costs? Is the volume variance a controllable variance from a spending point of view? Explain. 2. 3. 4. for the year. ru 10 n comprehensive Standard Cost Variances lL01, L02, L03,L04]