Haliburton Mills Inc. is a large producer of men$$s and women$$s clothing. The company uses standard costs for all of its products. The standard costs and actual costs for a recent period are given below for one of the company$$s product lines $($per unit of product$)$:

Standard

Cost Actual

Cost

Direct materials:

Standard: $3\mathrm{.}0$ metres at $$4\mathrm{.}90$ per metre $ $14\mathrm{.}70$

Actual: $3\mathrm{.}4$ metres at $$4\mathrm{.}65$ per metre $ $15\mathrm{.}81$

Direct labour:

Standard: $2\mathrm{.}9$ hours at $$3\mathrm{.}50$ per hour $10\mathrm{.}15$

Actual: $2\mathrm{.}6$ hours at $$3\mathrm{.}85$ per hour $10\mathrm{.}01$

Variable manufacturing overhead:

Standard: $2\mathrm{.}9$ hours at $$2\mathrm{.}70$ per hour $7\mathrm{.}83$

Actual: $2\mathrm{.}6$ hours at $$3\mathrm{.}05$ per hour $7\mathrm{.}93$

Fixed manufacturing overhead:

Standard: $2\mathrm{.}9$ hours at $$4\mathrm{.}30$ per hour $12\mathrm{.}47$

Actual: $2\mathrm{.}6$ hours at $$4\mathrm{.}35$ per hour $11\mathrm{.}31$

Total cost per unit $ $45\mathrm{.}15$ $ $45\mathrm{.}06$

Actual costs: $6,500$ units at $$45\mathrm{.}06$ $ $292,890$

Standard costs: $6,500$ units at $$45\mathrm{.}15293,475$

Difference in cost$$favourable $ $585$

During this period, the company produced $6,500$ units of product. A comparison of standard and actual costs for the period on a total cost basis is also given above.

There was no inventory of materials on hand to start the period. During the period, $22,100$ metres of materials was purchased and used in production. The denominator level of activity for the period was $17,240$ hours.

Required:

$1.$ For direct materials:

a$.$ Compute the price and quantity variances for the period. $($Indicate the effect of each variance by selecting $"$F$"$ for favourable, $"$U$"$ for unfavourable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

b$.$ Prepare journal entries to record all activity relating to direct materials for the period.

$2.$ For direct labour:

a$.$ Compute the rate and efficiency variances. $($Indicate the effect of variance by selecting $"$F$"$ for favourable, $"$U$"$ for unfavourable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

b$.$ Prepare a journal entry to record the incurrence of direct labour cost for the period. $($List debit entries first$).$

$3.$ Compute the variable manufacturing overhead spending and efficiency variances. $($Indicate the effect of each variance by selecting $"$F$"$ for favourable, $"$U$"$ for unfavourable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

$4.$ Compute the fixed overhead budget and volume variances. $($Indicate the effect of variance by selecting $"$F$"$ for favourable, $"$U$"$ for unfavourable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

$5.$ On seeing the $$585$ total cost variance, the company$$s president stated, $$It$$s obvious that our costs are well under control.$$ Do you agree?