Consider the following selected data regarding the manufacture of a line of sofas by Freedom Furnishers (FF): Standards per sofa Direct materials 2 square metres of input at $10 per square metre Direct manufacturing labour 0.5 hours of input at $20 per hour The following data were compiled regarding actual performance: Actual output units produced 20,000 sofas Direct Materials purchased and used 37,000 square metres Price per square metre for direct materials $9.00 Direct manufacturing labour costs $176.400 Actual manufacturing hours 9,000 hours Labour price per hour $19.60 Required: (a) Calculate price variance and efficiency variances for direct materials and identify whether a variance is favourable and unfavourable. Show your working. (4 marks) (b) Briefly discuss how could Freedom use the variance information for managerial performance evaluation? (5 marks) (c) Why it is important that Freedom Furnishers uses price and efficiency variance information combinedly while evaluating performance of the relevant managers? Briefly discuss using the variance calculated in requirement (a) above as an example