Huang Company uses a standard cost accounting system to account for the manufacture of exhaust fans. In July 2016, it accumulates the following data relative to 1,800 units started and fi nished. Cost and Production Data Actual Standard Raw materials Units purchased 21,000 Units used 21,000 22,000 Unit cost $3.70 $3.50 Direct labor Hours worked 3,450 3,600 Hourly rate $11.50 $12.00 Manufacturing overhead Incurred $94,800 Applied $100,800 Manufacturing overhead was applied on the basis of direct labor hours. Normal capacity for the month was 3,400 direct labor hours. At normal capacity, budgeted overhead costs were $16 per labor hour variable and $12 per labor hour fi xed. Total budgeted fi xed overhead costs were $40,800. Jobs fi nished during the month were sold for $270,000. Selling and administrative expenses were $20,000. Instructions (a) Compute all of the variances for (1) direct materials and (2) direct labor. (b) Compute the total overhead variance. (c) Prepare an income statement for management. (Ignore income taxes.)