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HandMI Corp. manufactures organic cotton totes in Michigan. The company estimates its production for the next four months as follows: July 5,000 units, August 7,000 units, September 7,500 units, October 8,000 units. Each tote requires 0.5 square meters of cotton. The company's cotton inventory policy is 30% of next months production needs. On July 1 cotton inventory was expected to be 750 square meters. What will cotton purchases be in July?

a. 3,575 square meters

b. 2,300 square meters

c. 2,700 square meters

d. 2,880 square meters

2. SpinMI Corp. uses a standard cost system. Standards are 3.9 sheets of inch nickel at $110 per sheet and 14.1 hours of labor at a standard wage rate of $14. During July, the company manufactured 600 units. Materials purchased and used totaled 2,580 sheets at a total cost of $272,450. Payroll totaled $121,920 for 8,790 hours worked. a. Calculate the direct materials price variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).)

b. Calculate the direct materials quantity variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).)

c. Calculate the direct labor rate variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).)

d. Calculate the direct labor efficiency variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).)