1. Outdoors Adventure Inc. manufactures hiking backpacks with the following standard cost structure:

STANDARD COST SHEET: HIKING BACKPACKS
Metal tubing Leather Padding Direct labor	6 meters @ RM3/meter 2 square meters @ RM7/sq. meters 3 kilograms @ RM4/kilogram 4 hours @ RM15/hour	RM18.00 14.00 12.00 60.00
Total standard cost RM104.00

During December 2016, 500 backpacks were manufactured and the following costs incurred:

ACTUAL COST INCURRED FOR DECEMBER 2016: HIKING BACKPACKS
Metal tubing Leather Padding Direct labor	3,100 meters 1,100 square meters 1,600 kilograms 1,800 hours	RM 9,455 7,722 6,560 27,270
Total cost RM 51,007

Required:

a. Calculate the material price variance, material usage variance, labor rate variance and labor efficiency variance. Note that for material variance, there are three (3) materials used in the production of the backpacks. You have to calculate the variances for each material and then the total for material variance.

b. Write a short report summarizing and analyzing the manufacturing operations of Outdoor Adventures Inc. for the month of December 2016.