Use the following information for the next six questions ? Chan Company produces a single product. The company has developed the following standards for one unit of output for the fiscal year 2014 ? The company uses machine hours to allocate both variable and fixed factory overhead to production. The company has 10,000 machine hours available ? The company is planning to produce and sell 10,000 units @ S100 each ? Budgeted sales for 2014 are based on an estimated market share of 10 percent Standard Cost per unit of output: Direct Materials: 3.0 lbs. @ $4.0/lbs. = Direct Labor: 2.0 hours @ $14.0/hour = VFOH: 1.0 Machine Hour @ $8.0/MHR = Total Fixed FOH costs for the period $12.00 / unit $28.00 / unit 5 8.00 / unit $160,000 ? During 2014, the company used 6,000 machine hours to produce 8,000 units. ? All production was sold at $110 per unit. ? The actual industry sales were 140,000 units Actual costs are as follows: Direct Materials: 4 pounds @ $ 3.5 pound Direct Labor: 18,000 hours @ $12/ hour Variable FOH: $ 82,000 Fixed FOH $170,000 4. What is the market size variance 5. What is the market share variance? 6. What is the sales price variance? 7. What is the sales volume variance? 8. What is the direct materials flexible budget variance? 9. What could be the effect of a favourable sales price variance? 10. Define budgets, budgeting, budgetary slack, 4-types of responsibility centres