Standard costing

The company produces product A. The company uses marginal costing system. The standard cost card for product is as follows:

Direct materials Direct labor (6 hours at USD 7.5/hour) Variable production overhead The budgeted and actual activity levels for the last quarter were as follows:

Budgeted Sales (units) 20 000 Production 20 000

The actual costs were as follows:

Actual 19 000 21 000

Direct material Direct labour Variable production overhead

Required:

USD 417 900 USD 949 620 USD 565 740

Calculate usage and price variances for all costs. Provide at least 2 possible causes for every variance calculated.