"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 $28,600 overall manufacturing cost variance is only 1.6% of the $1,787,500 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	3.50	feet	$ 2.50	per foot	$ 8.75
Direct labor	2.1	hours	$ 12	per hour	25.20
Variable overhead	2.1	hours	$ 2.00	per hour	4.20
Fixed overhead	2.1	hours	$ 6.00	per hour	12.60
Total standard cost per unit					$ 50.75

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

The company manufactured 15,000 units of product during the year.

A total of 50,000 feet of material was purchased during the year at a cost of $2.75 per foot. All of this material was used to manufacture the 15,000 units produced. There were no beginning or ending inventories for the year.

The company worked 33,000 direct labor-hours during the year at a direct labor cost of $11.75 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)	30,000
Budgeted fixed overhead costs	$ 180,000
Actual variable overhead costs incurred	$ 75,900
Actual fixed overhead costs incurred	$ 176,200