The standard costs of producing the antidote to the vanishing potion described earlier

(in Chapter 10) were as follows, with the actual costs shown alongside:

Standard Actual Number of bottles produced per batch 1,000 1,000 Direct materials per batch:

Ingredient A – quantity 10 kg 9 kg Ingredient A – price £80 per kg £82 per kg Ingredient B – quantity 5 kg 5 kg Ingredient B – price £60 per kg £59 per kg Ingredient C – quantity 14 kg 13 kg Ingredient C – price £40 per kg £40 per kg Bottles (price per bottle) £1 £1 Bottles used (note that 100 bottles were broken during actual production)

£1,000 £1,100 Direct labour per batch:

Mixing hours 10 11 Mixing pay rate per hour £4.50 £4.60 Liquidising hours 12 11 Liquidising pay rate per hour £4.75 £5 Bottling hours 10 11 Bottling pay rate per hour £5 £5 Other variable overheads Nil Nil Total fixed overheads (absorbed on a total direct labour hour basis)

£1,390 £1,500

(a) Calculate, in as much detail as possible, the standard cost variances for direct labour, direct materials and fixed overheads.

(b) Write a brief report regarding the variance analysis.