FOURTH Co. provided the following information:

Actual data for March 2023:

Materials purchased. 198,000 gallons @ 2.90.

Materials used: 196,000 gallons.

DL: 297,000 hours @ 12.40.

Standard costs and budgeted production:

Budgeted production: 48,000 units.

DM: 4 gallons @ $3 per gallon

DL: 6 hours @ $12 per hour

Calculate the DM and DL variances showing all your work in proper format.

Do not forget to indicate the variance name and formula and whether it is Favorable (F) or Unfavorable (U).

Give a possible explanation for the 2nd DM variance and the 1st DL variance.