The standard cost sheet for Chambers Company, which manufactures one product, follows:
Direct materials, 40 yards at $2.00 per yard . . . . . . . . . . . . . . . . $ 80
Direct labor, 5 hours at $20 per hour . . . . . . . . . . . . . . . . . . . . . 100
Factory overhead applied at 80% of direct labor
(variable costs = $60; fixed costs = $20) . . . . . . . . . . . . . . . . . . 80
Variable selling and administrative . . . . . . . . . . . . . . . . . . . . . . . 64
Fixed selling and administrative . . . . . . . . . . . . . . . . . . . . . . . . . 40
Total unit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $364
Standards have been computed based on a master budget activity level of 28,800 direct labor hours per month. Actual activity for the past month was as follows:
Materials used . . . . . . . . . . . . . . 228,000 yards at $2.05 per yard
Direct labor . . . . . . . . . . . . . . . . . 25,200 hours at $20.40 per hour
Total factory overhead . . . . . . . . $444,000
Production . . . . . . . . . . . . . . . . . 5,000 units
Required
Prepare variance analyses for the variable and fixed costs. Indicate which variances cannot be computed. Materials are purchased as they are used.