"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 $12,250 overall manufacturing cost variance is only 3% of the $880,000 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	4.00 feet	$	3.50	per foot	$	14.00
Direct labor	1.5 hours	$	12	per hour		18.00
Variable overhead	1.5 hours	$	2.00	per hour		3.00
Fixed overhead	1.5 hours	$	6.00	per hour		9.00
Total standard cost per unit					$	44.00

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 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 for the year.

The company worked 32,500 direct labor-hours during the year at a direct labor cost of $11.80 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)		25,000
Budgeted fixed overhead costs	$	150,000
Actual variable overhead costs incurred	$	68,250
Actual fixed overhead costs incurred	$	148,000

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.