Job costing system

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The Beal Manufacturing Company’s job costing system has two direct cost categories, direct materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labour-hours (DLH).  At the beginning of 2013, Beal adopted the following standards for its manufacturing costs based on production of 8,000 units:Input Cost per  Output Unit Direct materials

3 kilograms at $5 per kilogram $15

Direct manufacturing labour 5 hours at $15 per hour 75

Manufacturing overhead: 

Variable Fixed $6 per DLH 30

Fixed Cost$8 per DLH 40

Standard manufacturing cost per output unit $160

The denominator level for total manufacturing overhead per month in 2013 is 40,000 direct manufacturing labour-hours. The records for January indicate the following:

Direct materials purchased25,000 kilograms for $ 130,000 Direct materials used23,100 kilograms

Direct manufacturing labour40, 100 hours, at $14.60 per hour

Total actual manufacturing overhead Variable 280,000 Fixed320,000Actual production7,800 output units

Required:  For the month of January 2013, compute Material, Labour and Variable Overhead Variances.

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