Inman Corporation manufactures a single product. The standard cost per unit of product is as follows:

Direct materials2 kg of plastic at $5 per kilogram

$10.00

Direct labour2 hours at $12 per hour

24.00

Variable manufacturing overhead

8.00

Fixed manufacturing overhead

6.00

Total standard cost per unit

$48.00

The master manufacturing overhead budget for the month based on the normal productive capacity of 20,000 direct labour hours (10,000 units) shows total variable costs of $80,000 ($4 per labour hour) and total fixed costs of $60,000 ($3 per labour hour). Normal production capacity is 20,000 direct hours. Overhead is applied based on direct labour hours. Actual costs for producing 9,800 units in November were as follows:

Direct materials (20,500 kg)

$100,450

Direct labour (19,600 hours)

239,120

Variable overhead

78,100

Fixed overhead

59,200

Total manufacturing costs

$476,870

The purchasing department normally buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

Instructions

a.Calculate all of the materials and labour variances.

b.Calculate the total overhead variance.

c.Calculate the overhead budget variance and the overhead volume variance.