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$)$:

$02$:$47$:$20$

Actual costs: $7,000$ units at $$37\mathrm{.}08$

Standard costs: $7,000$ units at $$37\mathrm{.}40$

Difference in cost$-$favourable

During this period, the company produced $7,000$ 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, $22,400$ metres of materials was purchased and

used in production. The denominator level of activity for the period was $12,740$ hours.

Required:

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$).)$