Exercise 10-22 Straightforward Computation of Variances (LO 10-1, 10-3) Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct Labor: Quantity, 0.15 hour Rate, $7.50 per hour Direct Material: Quantity, 8 kilograms Price, $0.40 per kilogram Actual material purchases amounted to 188,000 kilograms at $0.450 per kilogram. Actual costs incurred in the production of 20,000 units were as follows: Direct labor: Direct material: $ 25, 120 for 3,200 hours $75,150 for 167,000 kilograms Required: 1. Use the variance formulas to compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance).) Direct-material price variance Direct- material quantity variance Direct-material purchase price variance Direct-labor rate variance Direct-labor efficiency variance $ $ $ $ $ 9,400 Unfavorable 2,800 Unfavorable 850 Unfavorable 1,120 Unfavorable 1,500 Unfavorable