Possible causes for price and efficiency variances. You are a student preparing for a job interview with a large Canadian consumer products manufacturer. You are applying for a job in the Finance Department. This company is known for its rigorous case-based interview process. One of the students who successfully obtained a job with the company upon gradua- tion last year advised you to "know your variances cold!" When you inquired further, she told that she had been asked to pretend that she was investigating wage and materials variances. Per her advice, you have been studying the causes and consequences of variances. You are you excited when you get to the interview and find that the first case you are presented with deals with variance analysis. You are given the following data for May for a detergent bottling plant:

REQUIRED Please respond to the following questions as if you were in an interview situation:
1. Calculate the materials efficiency and price variance, and the wage and labour efficiency variances for the month of May.
2. You are given the following context: “Union organizers are targeting our detergent bottling plant for a union.” Can you provide a better explanation for the variances that you have calculated on the basis of this information?LO1

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Actual Bottles filled Direct materials used in production Actual direct material cost Actual direct manufacturing labour-hours Actual direct labour cost Standards Purchase price of direct materials Bottle materials used Wage rate Bottles per minute 360,000 60,000,000 g $ 2,125,000 $ 22,040 hours 664,940 $ 0.035 per g 150 g $29.30 per hour 0.5