Dunn, Inc. is a privately held furniture manufacturer. For August 2014, Dunn had the following standards for one of its products, a wicker char; Standards per Chair Direct materials 3 square yards of input at $ 5.90 per square yard Direct manufacturing labor 0.5 hour of input at $ 10.30 per hour The following data were compiled regarding actual performance actual output units (chairs) produced, 2200 square yards of input purchased and used, 6,300 price per square yard $6.00, direct manufacturing labor costs. $9.450, actual hours of input, 900, labor price per hour, $10.50 Read the requirements Requirement 1. Show computations of price and efficiency variances for direct materials and direct manufacturing labor. Give a plausible explanation of why each variance occurred. Let's begin by determining the formula used to calculate the actual costs of direct materials, then enter the amounts in the formula and calculate the cost Actual cost x Budgeted price Cost Direct materials Next we will calculate the actual input at the budgeted price Actual input Direct materials X Direct manufacturing labor Determine the formula and calculate the costs for the flexible budget - Flexible budget cost X Direct materials Direct manufacturing labor x -X Requirements 1. Show computations of price and efficiency variances for direct materials and direct manufacturing labor. Give a plausible explanation of why each variance occurred. 2. Suppose 8,700 square yards of materials were purchased (at $6.00 per square yard), even though only 6,300 square yards were used. Suppose further that variances are identified at their most timely control point; accordingly, direct materials price variances are solated and traced at the time of purchase to the purchasing department rather than to the production department. Compute the price and efficiency variances under this approach