Vermont's Best Maple Syrup Variance Case Vermont's Best Maple Syrup Inc. is a small business selling a single product, pure Vermont maple syrup, since 1939. Their best-seller is the one-pint jug. The company's relevant range of production is between 600,000 and 800,000 jugs a year. Within the relevant range, variable costs per jug and total annual fixed costs remain constant. The company has the following data from its standard cost system. Standard Costs Variable costs per jug: Direct materials (5 gallons at $1.20 per gallon of maple tree sap) $6.00 Direct labor (0.04 direct labor hour at $16 per hour) $0.64 Variable mfg. overhead (0.04 direct labor hour at $21 per hour) $0.84 Selling and administrative expenses $2.00 Fixed costs per year: Mfg. overhead Selling and administrative expenses $921,600 $650,000 The planning budget income statement is based on the expectation of selling 640,000 jugs of maple syrup. The budgeted selling price is $15 per jug. For planning and control purposes, the company relies on its standard costs to derive their budgeted costs per jug of maple syrup. For example, the cost of direct materials reported on the planning budget income statement is calculated as $6.00 per jug times 640,000 jugs, which is $3,840,000. Also, the denominator level of activity is calculated as 0.04 direct labor hour per jug times 640,000 jugs, which is 25,600 direct labor hours. The company actually produced and sold 680,000 jugs at $15.25 per jug this year. The company does not have a beginning or ending raw materials inventory, because it uses all raw materials purchased. Also, the company does not have a beginning or ending finished goods inventory. Everything produced in the year is sold in that same year. The actual income statement for the year is provided below.