LO 4 2 a Direct materials rate variance, $5,000 8-40 Review of Chapters 7 and 8, three-variance analysis. (CPA, adapted) Beal Manufacturing Com- pany's 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 DMLH. At the beginning of 2018, Beal adopted the following standards for its manufacturing costs: Cost per Output Input Unit Direct materials 3 kg at $5 per kg $ 15 Direct manufacturing labour 5 hours at S15 per hour 75 Manufacturing overhead: Variable S6 per DMLH 30 Fixed $8 per DMLH 40 Standard manufacturing cost per output unit $160 The denominator level for total manufacturing overhead per month in 2018 40,000 DMLH, Beal's flexible budget for January 2018 was based on this denominator level. The records for January indicate the following: Direct materials purchased 25,000 kg at $5.20/kg Direct materials used 23,100 kg Direct manufacturing labour 40,100 hours at $14.60/hour Total actual manufacturing overhead (variable and fixed) $800,000 Actual production 7,800 output units Required 1. Prepare a schedule of total standard manufacturing costs for the 7,800 output units in January 2018, 2. For January 2018, calculate the following variances, indicating whether each is favourable (F) or unta vourable (U): a. Direct materials rate variance, based on purchases. b. Direct materials efficiency variance. 328 CHAPTERS ALEXIBLE BUDGETS, VARIANCES, AND MANAGEMENT CONTROL c. Direct manufacturing labour rate variance d. Direct manufacturing labour efficiency variance. e. Total manufacturing overhead rate variance. 1. VMOH efficiency variance. 9. Production-volume variance