Hopworks Urban Brewery (HUB) is a craft brewery in Portland, Oregon. It sells its beer in its brewpub and in cans to local grocery stores. It is registered as a B-Corporation and aims to be a sustainable, community-focused business through building strong relationships within the community. HUB has a costing system with two direct cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). HUB is looking into using a standard cost system and has developed the following standards (one "unit" is a batch of 12 dozen cans of beer).

Standards	Per Unit
Direct materials	60 pounds at $5 per lb.
Direct manufacturing labor	2 hours at $13 per hour
Manufacturing overhead
Variable	$7 per DLH
Fixed	$5 per DLH
Budgeted Fixed costs per month	$1,250

Actual cost and operating data from January:

Direct materials purchased	4,260 pounds at $4.90 per pound
Direct materials used	4,200 pounds to produce 60 batches
Direct manufacturing labor	$2,070 at an average cost of $13.80
Actual fixed manufacturing overhead	$1,350
Actual variable manufacturing overhead	$1,125

Q1. Calculate the standard cost of one batch. (8 points)

Q2. For the month of January, compute the following variances indicating whether each is favorable (F) or unfavorable (U): (8 points)

a. Direct material variances

b. Direct labor variances

c. Variable overhead variances

d. Fixed overhead variances

Q3. List some key points you would consider for HUB managers to show how they could benefit from a standard costing system and the issues you believe HUB is facing with the variances you found. (Short answer, not a business memo.) (4 points)