Compute the price, quantity, and flexible-budget variances for direct materials and direct labor. Use U or F to indicate whether the variances are unfavorable or favorable.

1. Begin by completing the variance analysis below for direct materials. Be sure to label each variance as favorable or unfavorable. (Enter all amounts as positive numbers. Round your answers to the nearest whole dollar.)

2. Prepare a plausible explanation for the performance.

	Direct Materials	Direct Labor
Actual price per unit of input (lb & hr)	10.75	14.2
Standard Price Per unit of input	10	15
Standard inputs allowed per unit of output	12	4
actual units of input	144600	57350
actual units of output (product)	14300	14300

are a plausible explanation for the performance.