curlys farms manufactures the bags of frozen french fries used at many restaurants. Last$$ week,curlys farms purchased$($transferred in from its potato$$ farms$)$ and used $98,000$ kg of potatoes at a price of $$0\mathrm{.}70$ per kilogram. During the$$ week, $1700$ direct labour hours were incurred in the plant at a rate of $$12\mathrm{.}35$ per hour. The standard price per kilogram of potatoes is $$$$0\mathrm{.}80,$ and the standard direct labour rate is $$12\mathrm{.}05$per hour. Standards indicate that for the number of bags of frozen fries$$ produced, the factory should have used $96000$ kg of potatoes and $1600$ hours of direct labour.

Requirements

$1.$ Determine the direct materials price and efficiency variances. Be sure to label each variance as favourable or unfavourable.

$2.$ Think of a plausible explanation for the variances found in Requirement

$3.$ Determine the direct labour price and efficiency variances. Be sure to label each variance as favourable or unfavourable.

$4.$ Could the explanation for the labour variances be tied to the material$$ variances? Explain.

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Part $1$

Requirement $1.$ Determine the direct materials price and efficiency variances. Be sure to label each variance as favourable or unfavourable. $($Enter the results as positive$$ numbers.$)$

Direct Materials Price Variance

Direct Materials Efficiency Variance