1. Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Quantity Standard Cost per Bag Direct Materials 20 kilograms $8.00 Direct Labor 0.1 hours 1.10 Variable Manufacturing Overhead 0.1 hours .40

The company had no beginning inventories of any kind on January 1. Variable manufacturing overhead is applied to production on the basis of direct labour hours. The results of the company's operations during January are as follows:

Production of Fastgro: 4,000 bags Direct Materials Purchased 85,000 kilograms at a cost of $32,300 Direct Labor Used 390 hours at a cost of $4,875 Variable Manufacturing Overhead Incurred $1,475 Inventory of Direct Materials on January 31 3,000 kilograms

What was the materials price variance for January? $1,300 unfavorable $1,640 favorable $1,640 unfavorable $1,700 favorable What was the materials quantity variance for January? $300 favorable $300 unfavorable $750 favorable $800 unfavorable