Lapworth County Council has been awarded the office window cleaning contract against competition from private firms. The contract price is $6.20 per office window and budget and actual results for first quarter are as follows:

Required

1. Calculate the sales price and quantity variances.
2. Calculate the relevant sales and variable overhead variances.
3. Comment on the effectiveness of standard costing in the public sector.

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Budget 12,500 council building windows @ $6.20 each Cost of window cleaners (3,200 hours @ $7.20) Cost of cleaning materials (1,250 bottles cleaning liquids @ $5.00) Variable overheads (3,200 hours @ $4.50) Actual 11,750 council building windows @ $6.20 each Cost of window cleaners (3,050 hours @ $7.10) Cost of cleaning materials (1,160 bottles cleaning liquids @ $5.00) Variable overheads 23,040 6,250 14,400 21,655 5,800 13,945 $ 77,500 72,850