Mr. Mario and Mr. Luigi own a pizza restaurant. Every day, they go annoy their managerial accountant Mrs. Peach and begin to argue about variances. Mr. Mario believes he has effective cost control and he should run the business. Mr. Luigi argues Mr. Mario cant run the business as he feels he is more suited to be a plumber. Mrs. Peach comes to you, Bob, Managerial accountant/Pizza store consultant to help put an end to their arguments. Mrs. Peach provides you the following information.

Standard Manufacturing Cost Elements Quantity Price Cost

Direct Material 6 Liters $0.90 $5.40

Direct Labor 0.5 Hours $12.00 $6.00

Manufacturing Overhead ? ? $2.40

During the month, the following transactions occurred in manufacturing 10,000 tubs of sauce (Mario loves it).

1. A total of 58,000 liters of materials were purchased at $1.00 per liter.

2. All the materials purchased were used to produce the 10,000 tubs of sauce.

3. A total of 4,900 direct labor hours were worked at a total labor cost of $56,350.

4. The variable manufacturing overhead incurred was $15,000 and the fixed overhead incurred was $10,400.

5. The manufacturing overhead rate of $4.80 is based on a normal capacity of 5,200 direct labor hours. The total budget at this capacity is $10,400 fixed and $14,560 variable.

Required:

A. Compute all material variances.

B. Compute all labor variances.

C. Compute all variable overhead variances.

D. Compute all fixed overhead variances.

E. Compute total overhead budget variance.

F. Compute overapplied/underapplied overhead.

G. Compute total manufacturing cost variance.