M&M Manufacturing Company's standard costing system allocates manufacturing overhead to

products on the basis of direct labour hours (DLH). At the beginning of 2021, M&M adopted the

following standards for its manufacturing costs:

Cost per Unit

Direct materials 3 kg. at $5 per kg.$15

Direct labour 5 hours at $15 per hour $75

Manufacturing overhead $14 per hour?

Standard cost per unit?

The denominator activity level for 2021 is 480,000 direct labour hours and the company expects

production to be spread out evenly throughout the year (on a monthly basis). The flexible budget

variable manufacturing overhead for January was $234,000 and variable manufacturing overhead

was over-applied by $4,000 in January. The accounting records for January indicate the following:

Direct materials purchased 25,000 kg. at $5.20 per kg.

Direct materials used 23,100 kg.

Direct labour40,100 hours at $14.60 per hour

Actual manufacturing overhead $600,000

Production 7,800 units

Required:

1. Calculate the total standard cost to manufacture the 7,800 units in January (by cost category and in total).

2. For January 2021, calculate all the cost variances (indicating the name of each variance).

3. What is the under/over-applied manufacturing overhead?