Question 4: 28 Marks The BC Division of Cooks Company produces small kitchen appliances. The company uses a standard cost system for production costing and control. The standard cost sheet for its most popular product, a toaster, is given below: Direct Materials (2.5 lbs. @ $4.00per pound) $10.00 Direct Labor (0.7 hr @ $10.50 per hour) $ 7.35 Variable Overhead (0.7 hr @ $6.00 per hour) $ 4.20 Fixed Overhead (0.7 hr @ $3.00 per hour) $ 2.10 Standard cost per unit $23.65 During the year, the BC experienced the following activity relative to the production of toasters: a) Production of toasters totaled 50,000 units. b) A total of 130,000 pounds of materials was purchased at $3.70 per pound. c) There were 10,000 pounds of raw materials in beginning inventory (carried at $4 per pound). There was no ending inventory. d) The company used 36,500 direct labor hours at a total cost of $392,375. e) Actual fixed overhead totaled $95,000. f) Actual variable overhead totaled $210,000. The BC produces all of its toasters in a single plant. Standard overhead rates are computed based on normal activity measured in standard direct labor hours. The company has a $10,500 favorable production volume variance. Material price variances are isolated as soon as possible. Required : a) Compute the materials price and efficiency variances. (4 Marks) b) Compute the labor price and efficiency variances. (4 Marks) c) Compute the overhead variances using the four way analysis. (8 Marks) d) What is the denominator level that was used to determine the fixed overhead rate. Give your answer in units and in direct labor hours. (2 Marks) e) Give the journal entry to record the variances calculated in a), b) and c) above. (10 Marks