Fosse Manufacturing Company has developed the following standards for one of their products:

STANDARD VARIABLE COST CARD

ONE UNIT OF PRODUCT

Direct materials 20 square meters at $10 per square meter

Direct labor 8 hours at $12 per hour

The company records materials price variances at the time of purchase. The following activities occurred during the month of May (Actual Cost):

Materials purchased 150,000 square meters at $10.50 per square meters

Materials used 96,000 square meters

Units produced 5,000 units

Direct labor 41,000 hours at $13.10 per hour

Actual variable overhead $238,000

1.Calculate the Material Price and Material Usage variances and indicate whether they are favorable or unfavorable. (2 marks)

2.Calculate the Labor Rate and Labor Efficiency variances and indicate whether they are favorable or unfavorable. (2 marks)