Baker Company employs a standard cost system. The standard product costs for direct materials were Six pieces at $6.25 per piece; for direct labor were 12 hours at $4.50 per hour; and for factory overhead were 12 hours at $2.00 per hour. During the month of May, production amounted to 400 sets. The direct materials used for the 400 sets amounted to 2,200 pieces for a total cost of

$15,400. The direct labor cost for 5,000 actual hours was $23,750. Actual factory overhead was

$9,500. A process cost system is used to accumulate costs. ml4 Required:

a Compute the direct materials efficiency and price variances and state whether they are favorable or unfavorable.

b Compute the direct labor efficiency and price variances and state whether they are favorable or unfavorable.