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Erie Company manufactures an MP3 player called the Jogging Mate. The company uses standards to control its costs. The labour and variable overhead standards that have been set for one Jogging Mate MP3 player are as follows:

Standard HoursStandard Rate per HourStandard CostDirect labour18minutes$13.50$4.05Variable overhead18minutes$4.00$1.20

Budgeted fixed overhead was estimated to be $24,975 per month. Fixed overhead cost is applied using direct labour-hours. During August, 5,000 hours of direct labour time was recorded in the manufacture of 17,500 units of the Jogging Mate. The direct labour cost totalled $77,075 for the month. Actual variable overhead and fixed overhead costs were $19,000 and $28,000, respectively.

Required:

1-a.What direct labour cost should have been incurred in the manufacture of the 17,500 units of the Jogging Mate?(Do not round intermediate calculations.)

1-b.Calculate the total direct labor cost variance?(Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

2.Calculate the labour rate variance and labour efficiency variance?(Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

3.Compute the variable overhead spending and efficiency variances for the month.(Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

4.Suppose the static budget volume is 16,500 playersthis is the denominator volume. Compute the volume variance for fixed overhead cost.(Round intermediate calculations to the nearest whole dollar amount. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

5.Suppose that the static budget volume is also the normal volume and that the budgeted variable overhead cost in the static budget is $22,200. Given the standard cost card data in the question, calculate the under- or overapplied fixed overhead for August.(Do not round intermediate calculations.)

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