The May budget for the Auberage Company shows $1,080,000 of variable conversion costs, $360,000 of fixed conversion costs, and 72,000 machine hours for the production of 24,000 units of product. During May, 76,000 machine hours were worked and 24,000 units were produced. Variance and fixed conversion costs for the month were $1,128,800 and $374,500, respectively.
a. Calculate the four conversion cost variances assuming that variable and fixed costs are separated.
b. Calculate the three conversion cost variances assuming that fixed and variable costs are combined.