Catherine's Kettle Potato Chips produces gourmet chips distributed to chain sub shops throughout California. To ensure that their chips are of the highest quality and have taste appeal, Catherine has a rigorous inspection process.

For quality control purposes, Catherine has a standard based on the pounds of chips inspected per hour and the number of pounds that pass or fail the inspection. Catherine expects that for every 6 comma 500 pounds of chips produced, 1 comma 300 pounds of chips will be inspected. Inspection of 1 comma 300 pounds of chips should take 1 hour. Catherine also expects that 4% of the chips inspected will fail the inspection. During the month of May, Catherine produced 1 comma 560 comma 000 pounds of chips and inspected 240 comma 500 pounds of chips in 190 hours. Of the 240 comma 500 pounds of chips inspected, 10 comma 420 pounds of chips failed to pass the inspection.

1.

Compute two variances that help determine whether the time spent on inspections was more or less than expected. (Follow a format similar to the one used for the variable overhead spending and efficiency variances, but without prices.)

2.

Compute two variances that can be used to evaluate the percentage of the chips that fails the inspection.