ABC limited produced 7800 widgets. The accounting records indicated the following:

Direct material purchased

25 000 kilograms @ $2.60 per kilogram

Direct material used

23 100 kilograms

Direct labour used

40 100 hours @ $18 per hour

The widget has the following standard prime costs:

Direct material: 3 kilograms @ $2.50per kilogram

Direct labour hours: 5 hours @ $17 per hour

Required:

A)Fill in the cells to calculate direct material and labour variances identifying the direct material price and quantity variances and the direct labour rate and efficiency variances separately.

B)Suggest at least one possible reason to explain each variance