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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

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"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 well," said Kim Clark, president of Martell Company. "Our $26,250 overall manufacturing cost variance is only 2.5% of the $1,050,000 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 with a standard cost card as follows: The following additional information is available for the year just completed: a. The company manufactured 20,000 units during the year. b. A total of 78,000 feet of material was purchased during the year at a cost of $3.75 per foot. All of this material was used to manufacture the 20,000 units produced. There were no beginning or ending inventories. c. The company worked 32,500 direct labor-hours at a direct labor cost of $11.80 per hour. d. Overhead is applied to products based on standard direct labor-hours. Data relating to manufacturing overhead costs follow: Required: 1. Compute the materials price and quantity variances. 2. Compute the labor rate and efficiency variances. 3. For manufacturing overhead compute: a. The variable overhead rate and efficiency variances. Required: 1. Compute the materials price and quantity variances. 2. Compute the labor rate and efficiency variances. 3. For manufacturing overhead compute: a. The variable overhead rate and efficiency variances. b. The fixed overhepd budget and volume variances. Note: For all requirements, indicate the effect of each variance by selecting "F" for favorable, " U " for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values

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