The Brown Manufacturing Company's costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). At the beginning of 2014, Beal adopted the following standards for its manufacturing costs:

Input Direct materials 5 lb. at $4 per lb. 20.00 Direct manufacturing labor 4 hrs. at $16 per hr. 64.00 Manufacturing overhead: Variable $8 per DLH 32.00 Fixed $9 per DLH 36.00 Standard manufacturing cost per output unit 152.00 The denominator level for total manufacturing overhead per month in 2014 is 37,000 direct manufacturing labor-hours. Beals flexible budget for January 2014 was based on this denominator level. The records for January indicated the following:

Direct materials purchased 40,300 lb. at $3.80 per lb. Direct materials used 37,300 lb. Direct manufacturing labor 31,400 hrs. at $16.25 per hr. Total actual manufacturing overhead (variable and fixed) $650,000 Actual production 7,600 output units

Requirement 2. For the month of January

20172017,

compute the variances, indicating whether each is favorable (F) or unfavorable (U).

Before computing the variances complete the tables below. Begin by completing the table for direct materials.

		Actual Input Qty.
		x
	Actual Costs	Budgeted Price		Flexible
	Incurred	Purchases	Usage	Budget
Direct materials