Determining Unit Costs, Variance Analysis, and Interpretation Big Dog Company, a manufacturer of dog food, produces its product in 1,000-bag batches. The standard cost of each batch consists of 11,000 pounds of direct materials at $0.40 per pound, 48 direct labor hours at $8.50 per hour, and variable overhead cost (based on machine hours) at the rate of $10 per hour with 18 machine hours per batch. The following variable costs were incurred for the last 1,000-bag batch produced: Direct materials 11,300 pounds costing $4,378 were purchased and used Direct labor 45 hours costing 5450 Variable overhead $250 Machine hours used 20 hours (a) Determine the actual and standard variable costs per bag of dog food produced, separated into direct materials, direct labor, and variable overhead. Round your answers to three decimal places. Actual Cost Standard Cost Direct materials 4.378 4.4 Direct labor 0.45 Variable overhead Total variable costs per bag $ $ $ 0.408 0.25 0.18 5.078 $ 4.988 $ (b) For the last 1,000-bag batch, determine the standard cost variances for direct materials, direct labor, and variable overhead. Round your answers two decimal places. Materials price variance 113 F Materials quantity variance 1200 Labor rate variance 67.5 U Labor efficiency variance Variable overhead spending variance $ 50U Variable overhead efficiency variance $ $ $ $ 25.5 F 20U (c) Which of the following is the most likely explanation for an unfavorable labor rate variance and a favorable labor efficiency variance? OUse of high efficiency equipment by undertrained employees. OUse of low efficiency equipment by highly skilled employees. OUse of poor quality materials resulting in overtime labor. ouse of higher skilled employees and high efficiency equipment