9-5B Comprehensive Variance Analysis Problem Smithco produces a plastic furniture set for outdoor use. The company's standard costs per set follow: Direct materials Direct labour Manufacturing overhead Quantity 10 kilograms 2 hours 2 hours Cost $6.00 per kg $15 per DL hour $5 per DL hour Total $60.00 30.00 10.00 $100.00 During the month, the company produced 200 furniture sets. The following information is known: 1.) The company purchased 2,300 kilograms of direct material at a cost of $13,000. 2.) The company had no beginning inventory and had 50 kilograms of material on hand at the end of the year. 3.) The direct labour workforce worked a total of 420 hours and was paid a total of $5,800. 4.) Variable overhead of $1,555 and fixed overhead of $600 were incurred. The manufacturing overhead rate of $5 per direct labour hour can be further broken down. The company estimates variable overhead to be $3.75 per direct labour hour. The company planned to make 180 furniture sets during the month and budgeted to use 360 direct labour hours. Accordingly, the company's variable overhead was budgeted to be $1,350 for the month. Fixed overhead was budgeted to be $450 for the month. Required: a Compute: a.) Direct Materials price and quantity variances. i. The company recently entered into a contract with a new supplier who is eager for their business. Should the company continue to work with this new supplier, or should they look for a new one. b.) Direct Labour rate and efficiency variances. i. The company experimented using more junior staff and fewer senior employees this month. Was the experiment successful? c.) Variable Overhead spending and efficiency variances. d.) Fixed Overhead spending and volume variances