Madetoja Oy’s job-costing system has two direct-cost categories: direct materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labour-hours (DLH). At the beginning of 2022, Madetoja adopted the following standards for its manufacturing costs:

The denominator level for total manufacturing overhead per month in 2022 is 40 000 direct manufacturing labour-hours. Madetoja’s flexible budget for January 2022 was based on this denominator level. The records for January indicate the following:

Required

1 Prepare a schedule of total standard manufacturing costs for the 7800 output units in January 2022.
2 For the month of January 2022, calculate the following variances, indicating whether each is favourable (F) or unfavourable (U):
a Direct materials price variance, based on purchases b Direct materials efficiency variance c Direct manufacturing labour price variance d Direct manufacturing labour efficiency variance e Total manufacturing overhead spending variance f Variable manufacturing overhead efficiency variance g Production-volume variance. Level 2 analysis

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Direct materials Direct manufacturing labour Manufacturing overhead Variable Fixed Standard manufacturing cost per output unit Input 3 kg at 5.00 per kg 5 hours at 15.00 per hour 6.00 per DLH 8.00 per DLH Cost per output unit 15.00 75.00 30.00 40.00 160.00