1. Gro-well Pty Ltd produces a single product, liquid fertilizer, in containers of one size, and uses a standard costing system. Based on 5000 direct labour hours per month,and with budgeted fixed factory overhead of $25000 per month, the standard cost specification is given as follows:

Standard cost specification- per container

Direct Material	4 litres @ 2.50 per litre	$10.00
Direct Labour	30 minutes @ $12.00 per hour	$6.00
Factory overhead	30 minutes @ $9.00 per direct labour hour	$4.50
		$20.50

Actual results for the month of April were:

Purchases of Material $

Direct material 40,000 litres $2.60 per litre 104,000

Factory supplies 3,000

Issue of material

Direct material 36,100 litres @ 2.50 per litre 90,250

Indirect material 3,200

Total factory Payroll paid 60,554

Factory labour incurred

Direct labour 4,740 hours @ 12.10 per hour 57,354

Indirect labour 3,800

Invoices received for other factory overhead expenses 38,000

Actual production-9500 containers

Gro-well Pty Ltd calculates and analyses all variances as early as possible.

Required:

1. Calculate standard cost variances for the month of April.

2. Provide the possible reasons for unfavorable variances.