Given the following information:

• Variable-overhead costs incurred: $20,570
• Material purchased and used: 2,900 pounds
• Direct labor costs incurred: 2,450 hours; $24,500
• Finished units produced: 500 units
• Actual material cost: $37 per pound
• Standard direct labor cost: $9 per hour
• Standard material cost: $40 per pound
• Standard variable overhead: $8 per hour
• Standard pounds of material in a financial unit: 6
• Standard direct labor hours per finished unit: 5

Required:

a. Compute the price and usage variances for direct material, labour, and the spending and efficiency variances for variable overhead. Indicate whether each variance is favorable or unfavorable.

b. Differentiate between a master-budget variance and a flexible-budget variance.