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

	Budget			Actual			Variance
Controllable costs
Raw materials	$	23,920		$	29,120		$	5,200	U
Labor		10,000			14,950			4,950	U
Maintenance		3,200			4,700			1,500	U
Supplies		2,750			1,800			950	F
Total	$	39,870		$	50,570		$	10,700	U

The budget had called for 5,200 pounds of raw materials at $4.60 per pound, and 5,200 pounds were used during August; however, the purchasing department paid $5.60 per pound for the materials. The wage rate used to establish the budget was $20.00 per hour. On August 1, however, it increased to $23.00 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 100 hours of overtime at a $34.50 rate. The projected 500 hours of labor in the budget would have been sufficient had it not been for the 100 hours of overtime. In other words, 600 hours of labor were used in August.

Required

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?

Calculate the variances of the items Ms. Morgans controlled during the period.