Alladdin Company EarPlug Production. Overhead is applied to products on the basis of direct labor hours. The denominator level of activity is 4,030 hours. The companys standard cost card is below:

Direct materials Memory Foam: 6 pieces per EarPlug at $0.50 per piece

Direct labor: 1.3 hours per EarPlug at $8 per hour

Variable manufacturing overhead: 1.3 hours per EarPlug at $4 per hour

Fixed manufacturing overhead: 1.3 hours per Earplug at $6 per hour

During January, the company produced 3,000 CrittEars. The fixed overhead expense budget was $24,180.

Actual costs in January were as follows:

Direct materials: 25,000 pieces purchased at a cost of $0.48 per piece

Direct labor: 4,000 hours were worked at a cost of $36,000

Variable manufacturing overhead: Actual cost was $17,000

Fixed manufacturing overhead: Actual cost was $25,000

Answer the below:

• Recommendation for dealing with the two large variances identified above. Make sure you consider how the reader will benefit from the desired actions and how you can make those actions easier. For example, you might say, "I will be glad to discuss this recommendation with you."