"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 $18,432 overall manufacturing cost variances is only 1.2% of the $1,536,000 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 line for a bonus this year."

The company produces and sells a single product. The standard cost card for the product follows:

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

a) The company manufactured 30,000 units of product during the year.

b) A total of 64,000 feet of material was purchased during the year at a cost of $8.55 per foot. All of this material was used to manufacture the 30,000 units produced. There were no beginning or ending inventories for the year.

c) The company worked 43,500 direct labor-hours during the year at a direct labor cost of $15.80 per hour.

d) Overhead is applied to the products on the basis of standard direct labor-hours. Data relating to manufacturing overhead cost follows:

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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 complete:

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

b) The fixed overhead budget and volume variances of the year.

Standard Quantity or Hours Standard Price or Rate Standard Cost Inputs Direct materials Direct labor Variable overhead Fixed overhead 2 feet 8.45 per foot 16 per hour 1.4 hours 2.50 per hour 6 per hour $ 16.90 22.40 3.50 8.40 1.4 hours$ 1.4 hours Total standard cost per unit $51.20