Happ Garden Supplies makes ground covers to prevent weed growth. During May, the company produced and sold 44,000 rolls and recorded the following cost data:

Requirements
1. Compute the price and efficiency variances for direct materials and direct labour.
2. For manufacturing overhead, compute the total variance, the flexible budget variance, and the production volume variance.
3. Prepare a standard cost income statement through gross profit to report all variances to management. Sales price was $10.60 per roll.
4. Happ Garden Supplies intentionally purchased cheaper materials during May. Was the decision wise? Discuss the trade-off between the two materials variances.

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Standard Actual Unit Cost Total Cost Direct materials: Standard (3 kg x $1.10 per k Actual (136,600 kg x $1.05 per kg). $3.30 $143,430 Direct labour: Standard (0.1 hr x $9.00 per hr) Actual (4,600 hrs x $8.80 per hr. 0.90 40,480 Manufacturing overhead Standard Variable (0.2 machine hr x $9.00 per hr$1.80 Fixed ($96,000 for static budget volume of 40,000 units and 8,000 machine hours)2.40 Actual... 4.20 168,800 Total manufacturing costs. $8.40 $352,710