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4. 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). 5,000 Variable manufacturing overhead cost... $25,000 Fixed manufacturing overhead cost. $59,000 The standard cost card for the company's only product is given below: Direct materials, 3 yards at $4.40 per yard $13.20 Direct labor, 1 DLH at $12.00 per DLH. 12.00 Variable manufacturing overhead, 1 DLH at $5.00 per DLH. 5.00 Fixed manufacturing overhead, 1 DLH at $11.80 per DLH. 11.80 Standard cost per unit $42.00 During the year, the company produced 6,000 units of product and incurred the following costs: Materials purchased, 24,000 yards at $4.80 per yard... $115,200 Materials used in production (in yards).. ...18,500 Direct labor cost incurred, 5,800 hours at $13 per hour $75,400 Variable manufacturing overhead cost incurred $29,580 Fixed manufacturing overhead cost incurred.. $60,400 Required: 1. Prepare an analysis of the variances for direct materials and direct labor for the year. 2. Prepare an analysis of the variances for variable and fixed overhead for the year. 3. 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

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