The L. Ming Company has had great difficulty controlling costs in Singapore during the past three years. Last month a standard cost and flexible-budget system was installed. Results for a department follow. All dollar figures are Singapore dollars. 

The department initially planned to manufacture 9,000 audio-speaker assemblies in 6,000 standard direct-labour-hours. However, material shortages and a heat wave resulted in the production of 8,100 units in 5,700 actual direct-labour-hours. The standard wage rate is $5.25 per hour, which is $0.20 higher than the actual average hourly rate. 

1. Prepare a detailed performance report with two major sections: direct labour and variable overhead. 

2. Prepare a summary analysis of price and efficiency variances for direct labour and spending and variances for variable overhead. 

3. Explain the similarities and differences between the direct labour and variable overhead variances. What are some of the likely causes of the overhead variances?

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Expected Cost per Standard Direct-Labour-Hour Flexible-Budget Variance $ 300 F Lubricants $0.60 Other supplies 225 U 0.30 Rework 450 U 0.60 Other indirect 450 U 1.50 labour Total variable $825 U $3.00 overhead F = Favourable U = Unfavourable