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, ooo. 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. a. LQV $4,800F b. Compute the total overhead variance. c. Prepare an income statement for management. (Ignore income taxes.)