Barkov Novelties Company, a maker of Christmas novelties, needs your help immediately. The company accountant resigned without leaving adequate records or explanations for the data collected. In reviewing the records for one product line, you find the following information for last month:

Materials purchased 20,000 units @ $.60 each Materials used 15,000 units Direct labor costs incurred $36,000 Variable overhead costs incurred $6,675 Actual fixed overhead $7,200 Completed units 7,000

You learn that the standards for the product are:

Direct materials 2 units Direct labor 1 hour Variable overhead $0.95 per direct labor hour Fixed overhead $0.60 per direct labor hour

You find a copy of the budget which shows that $ 6,000 was budgeted for fixed overhead, and that variable overhead was budgeted at $9,500 when 10,000 direct labor hours are worked per month.

You also find some handwritten notes among the accountants work papers, which indicate the following:

Standard price per unit for materials $ .62 Actual average wage rate $4.80 ($.20 less than the standard)

Required: a) Compute the eight variances that were discussed in class. b) Comment on the results.