"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 $40,800 overall manufacturing cost variance is only 2.5% of the $1,632,000 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. The standard cost card for the product follows:

Inputs	(1) Standard Quantity or Hours		(2) Standard Price or Rate		Standard Cost (1) (2)
Direct materials	4.50	feet	$ 4.60	per foot	$ 20.70
Direct labor	2.6	hours	$ 16	per hour	41.60
Variable overhead	2.6	hours	$ 1.70	per hour	4.42
Fixed overhead	2.6	hours	$ 8.00	per hour	20.80
Total standard cost per unit					$ 87.52

The following additional information is available for the year just completed:

The company manufactured 20,000 units of product during the year.

A total of 88,000 feet of material was purchased during the year at a cost of $4.70 per foot. All of this material was used to manufacture the 20,000 units produced. There were no beginning or ending inventories for the year.

The company worked 55,000 direct labor-hours during the year at a direct labor cost of $15.70 per hour.

Overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow:

Denominator activity level (direct labor-hours)	50,000
Budgeted fixed overhead costs	$ 400,000
Actual variable overhead costs incurred	$ 99,000
Actual fixed overhead costs incurred	$ 396,700

Required:

1. Compute the materials price and quantity variances for the year.

2. Compute the labor rate and efficiency variances for the year.

3. For manufacturing overhead compute:

a. The variable overhead rate and efficiency variances for the year.

b. The fixed overhead budget and volume variances for the year