Maxym Yattselev, the managerial accountant has been asked by the Keepit Cool Ceiling Fan Company president to prepare an analysis of the effectiveness of the new management team. They manufacture paper fans.

2005 standards Budget Direct materials - 4 parts @ $2 per part Direct labor - one half hour (0.5) @ $10 per hour Variable overhead 2 machine hours @ $3 per hour Fixed overhead $900,000 Estimated production 100,000

Actual results 2005 Direct materials 585,000 parts at a total cost of $1,462,500 were purchased and used Direct labor 51,000 hours at a cost of $561,000 Variable overhead 240,000 machine hours at a cost of $840,000 Fixed overhead $870,000 Actual production 130,000 fans

Required:

(1) Compute the direct material and direct labor budget variances

(2) Compute the variable and fixed overhead variances