Assume that during the past month, The Sultan produced 10,000 cartons of Sharpline highlighters. Sharpline has a translucent barrel and cap with a visible ink supply for see-through colour. The special fluorescent ink is fade- and water-resistant. Each carton contains 100 boxes of markers, and each box contains five markers. The markers come in boxes of one of five fluorescent coloursorange, blue, yellow, green, and pinkand in a five-colour set. The standard cost for one carton of 500 markers is as follows:

Standard

Manufacturing Cost Elements Quantity Price Cost

Direct materials

• Tips (boxes of 500) 500 $0.04 = $ 20.00
• Translucent barrels and caps (boxes of 500) 500 $0.08 = 40.00
• Fluorescent ink (5-litre container) 5 litres $6.50 per litre = 32.50

Total direct materials 92.50

Direct labour 0.25 hours $9.20 = 2.30

Overhead 0.25 hours $48.00 = 12.00

$106.80

During the month, the following transactions occurred in manufacturing the 10,000 cartons of highlighters:

1. Purchased 10,000 boxes of tips for $150,000 ($15 per 500 tips); purchased 10,200 boxes of translucent barrels and caps for $453,000 ($44.41 per 500 barrels and caps); and purchased 9,900 containers of fluorescent ink for $331,155 ($33.45 per five-litre container).

2. All materials purchased during the period were used to make markers during the period.

3. A total of 2,300 direct labour hours were worked at a total labour cost of $19,090 (an average hourly rate of $8.30).

4. The variable manufacturing overhead incurred was $34,600, and the fixed overhead incurred was $85,000.

5. The manufacturing overhead rate of $48.00 is based on a normal capacity of 2,500 direct labour hours.

Instructions:

(a). Compute the Sultans total variance.

(b). Compute the Sultans variance for each direct materials, direct labour, and manufacturing overhead.