Cute and Cuddly Ltd manufactures soft toys and has captured a large part of the Australian and South-East Asian market. It imports its fabrics from overseas and because of the recent favourable exchange rates has made a significant foreign exchange gain.

The managing director has also been informed that the standard costing system implemented in January 2020 shows that savings have been made in purchasing direct materials and in paying for direct labour. He is therefore very keen to evaluate the outcome of the standard costing system that was recently implemented and provides you with the following data for the month of May 2020:

	Budgeted	Actual
Fixed Manufacturing Overheads	$22,500	$25,000
Output in units for May 2020	45,000 units	47,500 units
	Standard	Actual
Direct materials input for each unit of output	2 kgs	2.2 kgs
Direct materials price per unit	$12.00 per kg	$11.75 per kg
Direct labour	3 hours per unit of output	147,250 hours
Direct labour rate	$15 per hour	$13.50 per hour
Variable manufacturing overhead rate	$18 per direct labour hour	$2,600,000

Required:

Calculate the following variances:

a) Direct materials Price Variance and Direct material Quantity Variance

b) Direct Labour Rate Variance and Direct Labour Efficiency Variance

c) Fixed Overhead Budget Variance and Fixed Overhead Volume Variance

d) Variable Overhead Efficiency and Variable Overhead Spending Variances