Activity-based costing variance analysis. Toymaster, Inc., produces a special kind of plastic toy car, TGC, for various manufacturers. Toymaster produces TGC in batches.

After each batch of TGC is run, the moulds are cleaned. The labour costs of cleaning the moulds can be traced directly7 to TGC because TGC can only be produced from a specific mould. Cleaning labour is paid on an hourly basis. The following information pertains to June 2007:

Static-Budget Amounts Actual Amounts Units ofTGC produced and sold 30,000 22,500 Batch size (number of units per batch) 250 225 Cleaning labour-hours per batch 3 3.5 Cleaning labour cost per hour $16.80 $15.00 Required 1. Calculate the flexible-budget variance for total cleaning labour costs in June 2007.

2. Calculate the price and efficiency variances for total cleaning labour costs in June 2007.

Comment on the results.