Carol Morgan manages the production division of Benson Corporation. Ms. Morgans responsibility report for the month of August follows:

Controllable costs	Budget	Actual	Variance
Raw materials	$ 20,400	$ 24,400	$ 4,000	Unfavorable
Labor	10,584	15,933	5,349	Unfavorable
Maintenance	3,500	5,300	1,800	Unfavorable
Supplies	2,600	1,350	1,250	Favorable
Total	$ 37,084	$ 46,983	$ 9,899	Unfavorable

The budget had called for 4,000 pounds of raw materials at $5.10 per pound, and 4,000 pounds were used during August; however, the purchasing department paid $6.10 per pound for the materials. The wage rate used to establish the budget was $19.60 per hour. On August 1, however, it increased to $22.60 as the result of an inflation index provision in the union contract. Furthermore, the purchasing department did not provide the materials needed in accordance with the production schedule, which forced Ms. Morgan to use 110 hours of overtime at a $33.90 rate. The projected 540 hours of labor in the budget would have been sufficient had it not been for the 110 hours of overtime. In other words, 650 hours of labor were used in August.

Required

a.When confronted with the unfavorable variances in her responsibility report, Ms. Morgan argued that the report was unfair because it held her accountable for materials and labor variances that she did not control. Is she correct?

b. Calculate the variances of the items Ms. Morgan controlled during the period.