The management of Napsacks is concerned with cost control and the reason why cost variances may be occurring. During 2020 the company manufactured and sold 400,000 napsacks. Budgeted production was 350,000 napsacks. The standard cost for each napsac: Direct materials Direct labour Variable overhead Budgeted Fixed overhead 4 meters 1.25 hours 1.25 hours $3 per meter $20 per hour $2.25 per direct labor hour $700,000 (1.25 hours) $1.60 per direct labor hour