Overhead is applied on the basis of standard machine hours. Three hours of machine time are

required for each direct labor hour. The jobs were sold for $$400,000$ Selling and administrative

expenses were $$40,000$ Assume that the amount of raw materials purchased equaled the amount used.

Instructions

$($a$)$ Compute all of the variances for $(1)$ direct materials and $(2)$ direct labor.

$($b$)$ Compute the total overhead variance.

$($c$)$ Prepare an income statement for management. $($Ignore income taxes$)$

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