Reference no: EM132823334

Question - Old School Snowshoes manufactures a single product. The standard cost of one unit of this product is as follows:

Standard Cost Card - Per Unit

Direct materials, 4 metres at $3.50 per metre $14

Direct labour, 1.5 DLH at $12 per DLH 18

Variable overhead, 1.5 DLH at $2 per DLH 3

Fixed overhead, 1.5 DHL at $6 per DLH 9

Standard cost per unit $44

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

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

b. A total of 58,500 metres of material was purchased during the year at a cost of $3.75 per metre. All of this material was used to manufacture the 15,000 units. There were no beginning or ending inventories for the year.

c. The company worked 23,000 direct labour-hours during the year at a cost of $11.80 per hour.

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

Denominator activity level (DLH) 25,000

Budgeted fixed overhead costs (from the flexible budget) $135,000

Actual fixed overhead costs $126,500

Actual variable overhead costs $51,750

Required -

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

2. Compute the direct labour rate and efficiency variances for the year.

3. Compute the direct labour rate and efficiency variances for the year.

a. The variable overhad spending and efficieny variances for the year.

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