CarLux Ltd manufactures car accessories. One of the company's products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 3,870 hours each month to produce 2,150 sets of covers. The standard costs associated with this level of production activity are: Total Per set of seat covers Direct materials 42,570 19.80 Direct labour 16,125 7.50 Variable manufacturing overhead (based on direct labour-hours) 7,095 3.30 30.60 During March, the factory worked only 3,500 direct labour hours and produced 2,250 sets of covers. The following actual costs were recorded during the month: Total Per set of seat covers Direct materials (11,700 metres) 45,630 20.28 Direct labour 17,250 7.60 Variable manufacturing overhead (based on direct 7,750 labour-hours) 3.40 31.28 At standard, each set of covers should require 6 metres of material. All of the materials purchased during the month was used in production. Required a) Compute the materials price and quantity variances for March. (10 marks) b) Compute the labour rate and efficiency variances for March. (10 marks) c) If variable manufacturing overhead is applied to production on the basis of direct-labour hours and the direct labour efficiency variance is unfavourable, will the variable overhead efficiency variance be favourable or unfavourable or could it be both? Explain your answer. (5 marks) d) Explain what is meant by the term management by exception. (5 marks)