Calculation of standard cost variances - Prime Costs Intermediate Minerals Limited (IML) uses a STANDARD COST SYSTEM for product costing in the manufacturing operation. The major material used is crushed magnesium ore product which is purchased according to the weight of the materials. The world price of magnesium ore has risen by almost 10% over the past year since the standard costs were last reviewed. Each tonne of material produced requires a standard quantity of raw material to produce. The PRIME COSTS are given below for each tonne produced: Standard material per unit: 2 tonnes of magnesium ore (rock) - Standard material cost: $2,000 per tonne. Standard labour hours per unit: 10.0 hours - Standard labour rate: $55.00 per hour During the past year the manufacturer produced 6,000 tonnes of their product. The ACTUAL COSTS and QUANTITIES used are shown below: Material PURCHASED: 15,000 tonnes at a total cost of $32,550,000. During the period 12,180 tonnes of material was used in production. Direct Labour costs for the period were $3,349,170 and 61,200 hours were worked.