Compute the following variances and state if they are favorable or unfavorable.

- Direct material price variance.

- Direct material efficiency variance.

- Direct labor rate variance.

- Direct labor efficiency variance.

- Fixed manufacturing overhead spending variance.

- Fixed manufacturing overhead volume variance.

- Name and explain two possible causes for the labor efficiency variance.

ABC Company uses a standard costing system for production costing and control. Standard direct labor hours based on practical capacity are used to compute overhead rates. The standard cost for the one of its products is as follows: Raw material Direct labor Variable overhead Fixed overhead Quantity Cost per unit 4.0 kilograms $ 10.00 2.6 hours 12.00 2.6 hours 10.00 2.6 hours 6.00 Total Cost $ 40.00 31.20 26.00 15.60 Annual practical capacity: 60,000 units During the year, the actual results are as follows: Quantity Cost per unit Total Cost Raw materials purchased 130,000 kilograms $ 9.40 $ 1,222,000 Raw materials, beginning 60,000 kilograms 10.00 600,000 Raw materials, ending - kilograms Direct labor 112,000 hours 13.00 1,456,000 Actual fixed overhead costs 756,000 Actual variable overhead costs 860,000 Actual annual production 55,000 units