The Justice Corporation mass produceswooden chairs. The standard costs follow:

Plastic                                                10 pounds at $4.50 per pound.

Molding                                                       3 feet at $3.00 per foot.

Directlabor                                             4hours at $15.00 per hour.

Variable overhead                                       $3per direct labor hour.

Fixedoverhead                                        $.75 per direct labor hour.

                                The static budget called for 80,000 direct labor hours in June.

Transactions during June follow:

• Justice purchased 200,000 pounds of plastic at $ 4.45 andissued 185,000 pounds to production.
• Justice purchased 60,000 feet of molding at $3.10 per foot andissued 50,000 feet to production.
• The direct labor payroll was 72,500 hours at $14.50.
• Overhead costs were $275,000 of which $221,125 wasvariable.
• Justice produced 18,000 chairs during the month.

                 Required:

1. Compute the direct materials, direct labor,variable overhead, and fixed overhead variances that were discussedin class.
2. Discuss the significance of thevariances.