Harrod Co. makes trains for Terrance the Train Engine. The trains are made in batches of 100. The company uses a standard costing system. The standard cost for one batch of 100 trains is as follows.

Direct materials (50 kg @ $0.50) $ 25

Direct labour (11 hours @$10) 110

Manufacturing overhead is determined on the basis of the following relation:

$15,120 + $9 per direct labour hour

Normal output is 200 batches; maximum capacity is 260 batches. During the month of April 2018, the company sold 240 batches and there were no beginning or ending inventories of figurines in April. The company's April 2018 financial report is shown below:

Actual

Sales $ 78,000

Cost of goods sold

Direct materials (purchased and issued) 6,000 (13,000 kg)

Direct labour 26,400 (2,970 hrs)

Manufacturing overhead 38,880

Gross margin $ 6,720

In April, the actual variable overhead rate per hour was an average of $8 per hour.

Required

1. Calculate all variances with respect to:
   1. Direct materials (3 marks)
   2. Direct labour (3 marks)

• Variable overhead (4 marks)

1. Fixed overhead (4 marks)
2. The company reports performance using the balanced scorecard. Under which perspective(s) would the variances be reported and used? Explain. (1 marks)