$7-24$ Materials and manufacturing labour variances, standard costs with inventory. $($LO $2)$ Keats Inc. is a privately held furniture manufacturer. For August, the company had the following standards for one of its products, a wicker chair: The following data were compiled regarding actual performance: actual output units $($chairs$)$ produced, $2,000$; square metres of input purchased and used, $3,700$; price per square metre, $$5\mathrm{.}10$; direct manufacturing labour costs, $$8,820$; actual hours of input, $900$; labour price per hour, $$9\mathrm{.}80.$Required Show your computations on the rate and efficiency variances for direct materials and for direct manufacturing labour. Give a plausible explanation of why the variances occurred.$$Suppose $6,000$ square metres of materials were purchased $($at $$5\mathrm{.}10$ per square metre$)$ even though only $3,700$ square metres were used. Suppose further that variances are identified with their most likely control point; accordingly, direct materials price variances are isolated and traced to the purchasing department rather than to the production department. Compute the rate and efficiency variances under this approach. Check Figure: $1.$ Direct materials price variance, $$370$ U $2687-25$ Journal entries and T$-$accounts $($continuation of $7-24).($LO $2)$ Prepare journal entries and post them to T$-$accounts for all transactions in Exercise $7-24,$ including requirement $2.$ Summarize how these journal entries differ from normal$-$costing entries.