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

Denominator activity (direct labour-hours)................................................20,000
Variable manufacturing overhead cost.....................................................$60,000
Fixed manufacturing overhead cost..........................................................$86,000

The standard cost card for the company’s only product is as follows:

Direct materials, 3 metres at $4.80/m.........................................................$14.40
Direct labour, 2 hours at $7/h.........................................................................14.00
Manufacturing overhead, 140% of direct labour cost.................................19.60
Standard cost per unit...................................................................................$48.00

During the year, the company produced 6,000 units of product and incurred the following costs:

Materials purchased, 24,000 metres at $5.10/m...................................$122,400
Materials used in production (in metres)....................................................18,500
Direct labour cost incurred, 11,600 hours at $7.50/h..............................$87,000
Variable manufacturing overhead cost incurred......................................$34,580
Fixed manufacturing overhead cost incurred..........................................$69,400

Required:

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

2. Prepare an analysis of the variances for materials and labour for the year.

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

4. What effect, if any, does the choice of a denominator activity level have on unit standard costs? Is the volume variance a controllable variance from a spending point of view? Explain.