Nelson Electronics Inc. began a new standard cost accounting system after monitoring costs over the past several years. Based on expected production of 8,000 units, Nelson’s new standard costing system would have predicted the following costs for the month of January for its main product line:

Assume that the company achieved the expected output of 8,000 units, but the actual costs for the month were as follows:

How would you evaluate the company’s performance during January?

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Direct materials.. $32.000 Direct labor.. 11,500 Variable overhead 2,900