Review ofChapters 7 and 8, three-variance analysis. (CPA, adapted) The Beal Manufacturing Company’s job-costing system has two direct-cost categories, direct materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is allocated to products based on standard direct manufacturing labour-hours (DLH). At the beginning of 2007, Beal adopted the following standards for its manufacturing costs:

Input Cost per Output Unit Direct materials 3 kilograms at $6 per kilogram $ 18 Direct manufacturing labour 5 hours at $18 per hour 90 Manufacturing overhead:

Variable $7.20 per DLH 36 Fixed $9.60 per DLH 48

$tandard manufacturing cost $192 per output unit The denominator level for total manufacturing overhead per month in 2007 is 40,000 direct manufacturing labour-hours. Beal’s flexible budget for January 2007 was based on this denominator level. The records forJanuary indicate the following:

Direct materials purchased Direct materials used Direct manufacturing labour Total actual manufacturing overhead

(variable and fixed)

Actual production 25,000 kilograms at $6.24 per kilogram 23.100 kilograms 40.100 hours, at $17.52 per hour

$720,000 7,800 output units Required 1. Prepare a schedule of total standard manufacturing costs for the 7,800 output units in January, 2007.

2. ForJanuary 2007, compute the following variances, indicating whether each is favourable

(F) or unfavourable (U):

a. Direct materials price variance, based on purchases

b. Direct materials efficiency variance

c. Direct manufacturing labour price variance

d. Direct manufacturing labour efficiency variance

e. Total manufacturing overhead spending variance

f. Variable manufacturing overhead efficiency variance g. Production-volume variance