Axion manufactures a household product. The standard cost of this product is

Direct material 3 kg at $1.25 per kg

Direct Labour 3 hours at $5.10 per hour

The company manufactures this product in batches of 50,000 units per month and all production is completed by the end of the period.

In October the actual results were:

Direct material 158,000 kg costing $189,600

Direct labour 158,000 hours costing $819,000

Prior to the compilation of the actual results some of the senior management were asked to comment on the possible outcome of the comparison exercise that would take place.

The purchasing manager stated that he had obtained very good terms from his suppliers and there should be a favourable price variance. The personnel manager reported that no increase in wage rates had been agreed, so there should be no variance emerging in the wage rate calculation.

Finally, the production manager was of the opinion that the labour force was efficient and the usage of materials would be improved.

You are required to calculate the following variances:

i.Direct material price variance

ii.Direct material usage variance

iii.Direct labour rate variance

iv.Direct labour efficiency variance

Please show answers step by step