Carp is a manufacturer of a single product. It uses a standard cost system based on a normal monthly production run requiring 2,400 direct labor hours. For July Year 3, Carp produced 500 finished units. (Assume no beginning or ending work in process.) To revise the analysis, click on each segment of underlined text below and select the needed correction, if any, from the list provided. If the underlined text is already correct in the context of the analysis, select [Original text] from the list. To: Production manager From: Cost accounting staff Re: Analysis of variances for July Year 3 This analysis of materials, labor, and overhead variances identifies significant deviations from expectations regarding July Year 3 production. Thus, corrective action may be needed. 1. Based on purchases, the direct materials price variance is $540 unfavorable. Choose an option below: O [Original Text] $540 unfavorable. $285 unfavorable. $285 favorable. $300 unfavorable. RESET 2. The direct materials usage variance is $675 favorable. Choose an option below: CANCEL ACCEPT [Original Text] $675 favorable. $390 favorable. $690 favorable. $975 favorable. RESET CANCEL ACCEPT