(Conversion cost variances) Guillermo Company budgeted $720,000 of variable con¬ version costs and $180,000 of fixed conversion costs for May 1996. When the budget was developed, Guillermo estimated 144,000 machine hours would be re¬ quired to make 48,000 units of product. During May, 152,000 machine hours were worked and die firm incurred $752,400 of variable conversion costs and $187,000 of fixed conversion costs. Fifty thousand units were produced in May.

a. Calculate the four conversion cost variances assuming separation of fixed and variable costs is maintained.

b. Calculate the three conversion cost variances assuming fixed and variable costs are combined.

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