CRX Industries Inc. manufactures a lid for a hydroponic garden planter. The standard cost for one planter is as follows: Std. Quality of Standard Price Standard Cost Hours or Rate Direct Materials 2.2 kgs $6.50 $14.30 Direct Labour .45 hours $9.00 $4.05 Variable Mfg. 1.20 machine l $2.50 per $0.50 Overhead hours machine hour Total Std. Cost $18.85 The plant has been experiencing problems for some time, as is shown by its June income statement when it made and sold 15,000 planters; the normal volume is 15,150 planters per month. Fixed costs are allocated using machine-hours. Flexible Budget Actual Sales (15,000 planters) $750,000 $750,000 Less: Variable Expenses: Variable COGS $282,750 $305,000 Variable Selling Exp $ 25,000 $ 25,000 Total Variable Expenses $307,750 $330.000 Contribution Margin $442,500 $420,000 Less: Fixed Expenses: Mfg. Overhead Selling and Admin Total Fixed Expenses $260,580 $105,000 $366,580 $260,5680 $105,000 $366,580 Net Income $75,920 $53,420 * Includes direct materials, labour and variable mfg. overhead Joe Bidenold, the general manager of the Plant, wants to get things under control. He needs information about the operations in June since the income statement signaled that the problem could be due to the variable cost of goods sold. Bidenold learns the following about operations and costs in June: a. 50,000 kilograms of materials were purchased at a cost of $6.25 per kilogram. b. 34,600 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignificant and can be ignored.) c. 14,800 direct labour-hours were worked at a cost of $10 per hour. d. Variable manufacturing overhead cost totaling $28,290 for the month was incurred. A total of 7,900 machine hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Pick 2 of the three below and calculate the following variances for June: 1. a. Direct materials price and quantity variances.(10 marks) b. Direct labour rate and efficiency variances. (10 marks) c. Variable overhead spending and efficiency variances.(10 marks) Do only two of three choices. (20 marks) 2. Is Joe Bidenold correct in his assumption, please explain, if not why