Bogh Co manufactures wooden picture frames.

The company's information system produces an operating statement, and on the basis of the variances calculated, managers are assessed and bonuses paid.

The standard material cost for each picture frame is $8. This is made up:

Wood                                   0.5 kg@ $10 per kg                                        $5

Glass                                   0.25 kg@ $12 per kg                                       $3

In July, Bogh manufactured 300 picture frames, and purchased:

Wood                            170 kg                                 $2,040

Glass                             70 kg                                  $860