Exercise #2 The production engineering staff and the factory accountant have set the following standards for Marley Ltd: Direct material Quantity (kgs) 4.00 Price per kg ($) 0.90 Direct labour Quantity (hrs) 0.25 Rate per hour ($) 33.00 Actual material purchases amounted to 240,000 kgs at $0.93 per kg. Actual costs incurred in the production of 50,000 units were as follows: Direct material 210,000 kgs for $195,300 Direct labour 13,000 hrs for $448,500 Required: (a) Calculate the direct material and direct labour variances, indicating whether each variance is favourable or unfavourable. (b) Prepare journal entries to record: (i) The purchase of direct materials and use of direct materials in production. (ii) The use of direct labour in production. (iii) The closing of variances to cost of goods sold