Reference no: EM133001183

The Atlanta Company uses a standard cost system in which manufacturing overhead costs are applied to units of the company's single product on the basis of direct labor-hours (DLHs). The standard cost card for the product follows:

Standard Cost Card-per unit of product:

Direct Materials, 4 yards at $3.50 per yard

Direct Labor, 1.5 DLHs at $8 per DLH

Variable Overhead, 1.5 DLHs at $2 per DLH

Fixed Overhead, 1.5 DLHs at $6 per DLH

The following data pertain to last year's activities:

1. The company manufactured 18,000 units of product during the year. A total of 70,200 yards of material was purchased during the year at a cost of $3.75 per yard. All of this material was used to manufacture the 18,000 units.
2. The company worked 29,250 direct labor-hours during the year at a cost of $7.80 per hour.
3. The budgeted activity level was 22,500 direct labor-hours.
4. Budgeted fixed manufacturing overhead costs were $135,000 while actual manufacturing overhead costs were $133,200.
5. Actual variable manufacturing overhead costs were $61,425.

Problem 1: Compute the fixed overhead spending variance for the year.

Problem 2: Compute total standard cost per unit.