Gail Cleaners produces a commercial cleaning compound known as Carpex. The direct materials and direct labour standards for one unit of Carpex follow:Gail Cleaners produces a commercial cleaning compound known as Carpex. The direct materials and direct labour standards for one

unit of Carpex follow:

The budgeted fixed overhead cost is $$14,614$ per month. The denominator activity level of the allocation base is $800$ direct labour$-$

hours.

During the most recent month, the following activity was recorded:

a$.9,900$ kilograms of material were purchased at a cost of $$2\mathrm{.}22$ per kilogram.

b$.$ A total of $850$ hours of direct labour time was recorded at a total labour cost of $$9,110.$

c$.$ The variable overhead cost was $$1,580,$ and the fixed overhead cost was $$14,704.$

Assume that the company produced $1,600$ units during the month, using $6,600$ kilograms of material in the production process. $($The

rest of the material purchased remained in inventory.$)$

Required:

Compute the direct materials price and quantity variances for the month. $($Indicate the effect of each variance by selecting $"$F$"$ for

favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

Standard Quantity

or Hours Standard Price

or Rate Standard

Cost

Direct materials $4\mathrm{.}10$ kilograms $ $2\mathrm{.}20$ per kilogram $ $9\mathrm{.}02$

Direct labour $0\mathrm{.}40$ hour $ $10\mathrm{.}00$ per hour $4\mathrm{.}00$

Variable overhead $0\mathrm{.}40$ hour $ $1\mathrm{.}30$ per hour $0\mathrm{.}52$

The budgeted fixed overhead cost is $$14,614$ per month. The denominator activity level of the allocation base is $800$ direct labour$-$hours.

During the most recent month, the following activity was recorded:

$9,900$ kilograms of material were purchased at a cost of $$2\mathrm{.}22$ per kilogram.

A total of $850$ hours of direct labour time was recorded at a total labour cost of $$9,110.$

The variable overhead cost was $$1,580,$ and the fixed overhead cost was $$14,704.$

Assume that the company produced $1,600$ units during the month, using $6,600$ kilograms of material in the production process. $($The rest of the material purchased remained in inventory.$)$

Required:

$1.$ Compute the direct materials price and quantity variances for the month. $($Indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$