Reference no: EM131882401

Problem - Flandro Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company's budget for the current year:

Denominator activity (direct labor-hours)	12,800
Variable manufacturing overhead cost	$60,160
Fixed manufacturing overhead cost	$128,000

The standard cost card for the company's only product is given below:

Direct materials, 3 yards at $3.40 per yard	$10.20
Direct labor, 2 hour at $11 per hour	22.00
Manufacturing overhead, 133.64% of direct labor cost	29.40
Standard cost per unit	$61.60

During the year, the company produced 4,800 units of product and incurred the following costs:

Materials purchased, 36,000 yards at $3.30 per yard	$118,800
Materials used in production (in yards)	25,000
Direct labor cost incurred, 13,000 hours at $8.4 per hour	$109,200
Variable manufacturing overhead cost incurred	$34,600
Fixed manufacturing overhead cost incurred	$33,800

Requirement 1: Redo the standard cost card in a clearer, more usable format by detailing the variable and fixed overhead cost elements.

Requirement 2: Prepare an analysis of the variances for direct materials and direct labor for the year.

Requirement 3: Prepare an analysis of the variances for variable and fixed overhead for the year.