Hasak Corp makes 100 kg containers of vegetable seeds, and has the following unit standard costs for direct materials and direct labour:

Direct materials (60 kg @$3.00 per kg) $180.00

Direct labour (0.40 hours at $18.00 per hour) $7.20

Total standard costs per 100 kg container: $187.20

The following activities were recorded in June: 1. 2,000 containers were manufactured 2. 92,000 kg of materials costing $62,000 were purchased. 3. 173,000 kg of materials were used. 4. $23,000 was paid for 270 hours of direct labour. There were neither beginning nor ending WIP inventories on hand.

Required: a) Compute the direct materials variances. 10 marks

b) Compute the direct labour variances. 10 marks

c) Suggest rational explanations for each variance. 5 marks