Here are budget and standard cost data for July for Tino’s Lasagna:

Budgeted sales................................................. 2,500 lasagnas at $10 per lasagna

Budgeted production..................................................................... 2,500 lasagnas

(Tino’s uses just-in-time production methods.)

Budgeted marketing and administrative costs .................. $2,500 per month (all fixed)

Standard costs to make one lasagna:

Pasta ........................................................................................ 1/2 pound at $1 per pound

Labor........................................................................ 1/4 hour per lasagna at $10 per hour

Production overhead.............................. $5,000 per month (fixed) plus $0.50 per lasagna

for extra ingredients, veggie, olive, and beef

For July, the results were as follows:

3,000 lasagnas made and sold; revenue was $28,000.

1,525 pounds of pasta used at $1.05 per pound.

800 labor hours used at $10 per hour.

Production overhead costs were $5,500 fixed and $1,750 variable.

Marketing and administrative costs were $3,250.

a. Compute as many variances as possible.

b. Write a brief report to the management of Tino’s that gives your evaluation of performance and suggests ways management might improve the company’s performance.