2. Matter Company has set the following standards for one unit of product: Direct material Quantity: 5 pounds per unit Price per pound: $9 per pound Direct labor Quantity: 3 hours per unit Rate per hour: $20 per hour Actual costs incurred in the production of 2,000 units were as follows: Direct material: $89,280 ($9.30 per pound) Direct labor: $118,900 ($20.50 per hour) All materials purchased were consumed during the period. Required: Calculate the direct-material price and quantity variances and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. Straightforward Calculation of Variances Willard manufactures a product that has the following standard costs: Direct materials: 40 yards at $2.70 per yard Direct labor: 8 hours at $18.00 per hour Total $108 144 $252 The following information pertains to July: Direct material purchased: 42,000 yards at $2.76 per yard, or $115,920 Direct material used: 36,000 yards Direct labor: 7,200 hours at $18.30 per hour, or $131,760 Actual completed production: 1,000 units Required: Calculate the direct-material price and quantity variances and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.