Areeb Khan, the managing director of the Birsch$$s Group has asked you to compare the

budgeted data to actual information for the men$$s jeans product line for the month of December

$2022.$ She has given you the following information:

Birsch$$s uses a standard absorption costing system. The standard production requirements to

produce six pairs of jeans are $15$ meters of material and $4$ hours of direct labor. Overheads are

applied on the basis of direct labor hours and have been determined based on an annual capacity

of $57600$ pairs of jeans. At this level, overhead is $25\%$ fixed and $75\%$ variable. Material

price is budgeted at R$4/$metre while direct labor is expected to cost R$20/$hour$.$ The budgeted

rate for total overheads is R$13\mathrm{.}50$ per hour. Variable overhead costs vary with direct labor hours.

Actual information for the month of December $2022$:

$4680$ pairs of jeans were produced, using $12500$ metres of material.

$$ Material purchased and issued to production in December cost R$35200.$

$$ The labor rate actually paid in December was $17\mathrm{.}5\%$ higher than budgeted.

$$ The total labor hours worked for the month of December was $3220.$

$$ The total overhead rate for the month amounted to R$14$ per hour, of which $75\%$ was

variable.$($a$)$ Calculate the material, labor, and variable

overhead variances in as much detail as possible

for the men$$s jeans product line for December $2022.$

$($b$)$ Discuss possible reasons for the following:

$$ A favorable material price variance

$$ An unfavorable material usage variance

$$ An unfavorable labor rate variance

$$ An unfavorable labor efficiency variance