Amber Manufacturing produces ceramic teapots. Amber allocates overhead based on the number of direct labor hours. The company is looking into using a standard cost system and has developed the following standards? (one "unit" is a batch of 100 ?teapots):

Standards:

Direct material 50 pounds per batch at $2.00 per pound

Direct Labor 2.0 hours per batch at $16.00 per hour

Variable MOH standard rate $6.00 per direct labor hour

Predetermined fixed MOH standard rate $5.00 per direct labor hour

Total budgeted fixed MOH cost $1,250

Actual cost and operating data from the most recent month are as follows:

purchased 3,660 pounds at a cost of $1.70 per pound

used 3,400 pounds in producing 60 batches

actual direct labor cost of $2,324 at an average direct labor cost per hour of $16.60

Actual variable MOH $924

actual fixed MOH $1,550

All manufacturing overhead is allocated on the basis of direct labor hours.

Requirements:

1.

Calculate the standard cost of one batch.

Standard cost	Standard cost per batch
Direct materials
Direct labor
variable MOH
Fixed MOH
Total standard cost

2.

Calculate the following? variances:

a. The direct material variances.

b. The direct labor variances.

c. The variable manufacturing overhead variances.

d. The fixed manufacturing overhead variances.

3.

Have the? company's managers done a good job or a poor job controlling?materials, labor, and overhead? costs? Why or why? not?

4.

Describe how the? company's managers can benefit from the standard costing system. Do you think the company should continue with the standard cost?system?