Thatcher and Blair, Ltd., manufactures a special type of brass fitting in its plant in London, England. The company prepares its budgets on the basis of standard costs. A monthly responsibility report shows the differences between budgeted and actual costs. Variances are analyzed and reported separately. Material price variances are computed at the time of purchase.

The following information relates to the current period. [All monetary amounts are given in British pounds (£) sterling. On the day this problem was written, the British pound was equivalent to .5241 US dollar. ]

Standard costs (per unit of output)

Direct material, 1 kilogram @ £1 per kilOQrAM ........ceeeeectteeeeeee aaa Direct labor 2 hoursi@:24 wer Olja cemecnree mteee encere 8 Variable manufacturing overhead (25% of direct-labor cost)....... begs VOtallStancalcliCOst Serec temmmerteree trereee smte aente rtenetn ett eeeme eee Silat Actual costs for the month follow:

Maternal Une nhaSeG kien exe iene tater OUT Ut Wy a ees ee ae AUN Eee Oat oe AcivaliGireciziaboncostverscs) weit oe Actual variable overhead..........cccccccceseceeenees 3,000 kilograms at £.95 per kilogram 1,900 units using 2,100 kilograms of material 8,200 hours at £4.50 per hour

£5,100

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Required Prepare a cost-variance analysis for the variable costs (i.e., direct material, direct labor, and variable overhead). Remember to express your analysis in terms of the British monetary unit, pounds sterling.