Barberry, Inc., manufactures a product called Fruta. The company uses a standard cost system and has established the following standards for one unit of Fruta Standard Price or Rate $ 6.00 per pound $12.00 per hour $ 2.50 per hour Standard Standard Quantity Cost Direct materials Direct labor Variable manufacturing overhead 1.5 pounds 0.6 hours 0.6 hours $ 9.00 7.20 1.50 $17.70 During June, the company recorded this activity related to production of Fruta: a. The company produced 3,000 units during June b.A total of 8,000 pounds of material were purchased at a cost of $46,000 c. There was no beginning inventory of materials, however, at the end of the month, 2,000 pounds of material remained in ending inventory d. The company employs 10 persons to work on the production of Fruta. During June, they worked an average of 160 hours at an average rate of $12.50 per hour. e. Variable manufacturing overhead is assigned to Fruta on the basis of direct labor-hours. Variable manufacturing overhead costs during June totaled S3,600 The company's management is anxious to determine the efficiency of Fruta production activities Required 1. For direct materials a. Compute the price and quantity variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance) Omit the "S" sign in your response.) Materials price variance Materials quantity variance (Click to select) Click to select) b. The materials were purchased from a new supplier who is anxious to enter into a long term purchase contract. Would you recommend that the company sign the contract? es O No