Cordon Corporation set the following standard unit costs for its single product:

Standard Costs:	Materials needed	Cost of material	Standard Costs
Direct Materials	25 lbs	$4.00/lb	$100/unit
Direct Labor	6 DLH	$8.00/DLH	$48/unit
Factory Overhead - Variable	6 DLH	$5.00/DLH	$30/unit
Factory Overhead - Fixed	6 DLH	$7.00/DLH	$42/unit
Total Standard Costs			$220/unit

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available:

	Operating Levels
	70%	80%	90%
Production in units	42,000	48,000	54,000
Standard direct labor hours	252,000	288,000	324,000
Budgeted Overhead
Variable MOH	$ 1,260,000	$ 1,440,000	$ 1,620,000
Fixed MOH	$ 2,016,000	$ 2,016,000	$ 2,016,000

During the current quarter, the company operated at 70% of capacity and produced 42,000 units of product: direct labor hours worked were 250,000.

Actual costs incurred during the current quarter follow:

Direct materials (1,000,000)	$ 4,250,000
Direct labor (250,000)	1,937,500
Fixed factory overhead costs	1,960,000
Variable factory overhead costs	1,200,000
Total actual costs	$ 9,347,500

Required:

1) Prepare the Direct Materials Price and Quantity variances

2) Prepare the Direct Labor Rate and Efficiency variances

3) Prepare the Variable Overhead Spending and Efficiency variances

4) Put together a story about what happened with the company costs this year (i.e. why are the variances the way they are)