Hi,

I need help answering these two questions regarding this problem.

1) Explain the significance of the variable and fixed manufacturing overhead variances.

2) Is the volume variance a controllable variance from a spending point of view? explain.

Thank you!

Comprehensive Standard Cost Variances LO9-4, LO9-5, LO9-6, LO9-7 Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but duction people did a good job in controlling costs as well," said Kim Clark, president of Martell Com "Our $ 18,300 overall manu PROBLEM 9A-10 our pro- facturing cost variance is only 1.2% of the $1,536,000 standard cost of products made during the year. That's well within the 3% parameter set by management or acceptable variances t looks like everyone will be in line for a bonus this year." The company produces and sells a single product. The standard cost card for the product follows: Standard Cost Standard Quantity or Hours 2 feet 1.4 hours 1.4 hours 1.4 hours Standard Price or Rate Inputs Direct materials. Direct labor $8.45 per foot $16 per hour $2.50 per hour $6 per hour $16.90 22.40 3.50 8.40 $51.20 Total standard cost per unit Flexible Budgets, Standard Costs, and Variance Analysis The following additional information is available for the year just completed: The company manufactured 30,000 units of product during the year. A total of 64,000 feet of material was purchased during the year at a cost of $8.55 per foot. All of this material was used to manufacture the 30,000 units produced. There were no beginning or ending inventories for the year. a. b. c. The company worked 43.500 direct labor-hours during the year at a direct labor cost of $15.80 per hour. d. Overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow: Budgeted fixed overhead costs . Actual variable overhead costs incurred................ . . . Actual fixed overhead costs incurred .. $108,000