Free Wheeling Tires manufactures a tire for utility trailers. Tire composition is 35% rubber, 28% Carbon black, 22% steel and 15% fillers. Rubber is budgeted at $ 8 per lb, Carbon black at $5 per lb, steel at $10 per lb, and filers at $4 per lb. Each tire produced weights 20 lbs uninflated. To produce 45,000 tires Free Wheeling purchased 320,000 lb of rubber at $7.80 per lb, 260,000 lb of Carbon Black at $5.25 per lb, 220,000 lb of Steel at $10.30 per lb and 140,000 lb of filers at $3.75 per lb. The amount of material used is 317,500 lb of rubber, 250,000 lb of Carbon Black, 200,000 lb of steel, and 132,000 lb of filers. Every tire requires .005 hours of supervisor time and .02 hours of technician time. Supervisors are paid $50 per hour and technicians are paid $ 27 per hour. To produce 45,000 tires staff worked a total of 1,250 hours (245 worked by supervisors and 1,025 worked by technicians). Salaries of $12,400 were paid to Supervisors and $27,500 to technicians.

Required:

a. Compute labour rate and efficiency variances for supervisor and for technicians.

b. Compute mix and yield labour variances for supervisor and for technicians.

c. Compute material price and efficiency variances for each ingredient

d. Compute mix and yield material variances for each ingredient

e. Explain why the variances happened?