Process Costing Variances; Equivalent Units: Cherry Pink, Inc., produces a single product known as Apple Blossom White. Cherry Pink uses the FIFO process costing method. To analyze production performance, actual results are compared to the flexible budget, and any variances are computed. The standard costs that form the basis for the budget are as follows:

Data for the month are presented below:

1. Beginning inventory consisted of 2.500 units that were 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs.

2. Ten thousand units were started during the month.

3. Ending inventory consisted of 2,000 units that were 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs.

4. Costs applicable to the current period production are as follows:

Required:

Compute variances. Materials are added at the beginning of the process; conversion costs are added evenly throughout.

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Direct materials Direct labor Variable overhead 1 kilogram at $10 per kilogram 2 hours at $4 per hour 2 hours at $1.25 per hour