Sanchez Company planned to produce 10,000 units of its only product during the year. Sanchez established the following standard cost data for this product prior to the beginning of the year:

Assume that Sanchez (1) actually produced 9,000 units, (2) used 17,000 pounds of direct materials in production, (3) and incurred the following actual total costs:

Required

a. Calculate the variances for materials, labor, and variable overhead.

b. Does the difference between total actual costs and total standard costs equal the sum of all of the variances? Explain.

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Direct materials (2 lb. @ $7.50 per lb.).. Direct labor (1.5 hr. @ $13.50 per hr.) Variable overhead (1.5 hr. @ $6 per hr.) Total standard cost per unit Total budgeted fixed overhead is $144,000. Per Unit $15.00 20.25 9.00 $44.25