3 The Fox Company uses a standard cost accounting system. The standard costs for the prime costs of its single product are as follows: Standard Cost Card-per unit of product Direct Materials (4 metres at 3.50 per metre) Direct Labor (1.5 DLHS at 8 per DLH) The following data pertain to last year's activities: 14 12 The company manufactured 18,000 units of product during the year. A total of 70,200 metres of material was purchased during the year at a cost of 3.75 per metre. All of this material was used to manufacture the 18,000 units. The company worked 29,250 direct labour-hours during the year at a cost of 7.80 per hour. Required: a) Compute the direct materials price and quantity variances for the year. b) Compute the direct labour rate and efficiency variances for the year. (3 Marks) (3 Marks) c) Explain two reasons why splitting production costs into price and efficiency (quantity) variances is beneficial for management control. (4 marks) (Total: 10 Marks)