Refer to the information provided in Problem 11-28. Assume that First-Aid-Care actually produced 100,000 cartons of Young-Ones and 90,000 cartons of Surga-Aid. The actual overhead costs incurred were as follows:
Maintenance ............................ $ 81,300
Indirect labour ......................... 143,600
Power ................................... 18,700
Rent ..................................... 39,000
In Problem 11-28. Nadia Tamimi, controller for First-Aid-Care Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of bandages for hospitals: (1) Young-Ones, designed for children, and (2) Surga-Aid, designed for use on larger injuries. The two lines of bandages use common raw materials in different proportions. The company expects to produce 80,000 cartons of each product during the coming year. Young-Ones requires 0.20 direct labour hours per carton, and Surga-Aid requires 0.30 direct labour hours per carton. Nadia has developed the following fixed and variable costs for each of the four overhead items:

Required:
1. Calculate the number of direct labour hours budgeted for actual production of the two products.
2. Prepare a performance report for the period based on actual production.
3. Based on the report, would you judge any of the variances to be significant? Can you think of some possible reasons for the variances?

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Variable Rate per Direct Labour Hour Overhead Item Fixed Cost Maintenance $57,250 S0.50 Power 0.40 2.10 Indirect labour Rent 43,500 39,000