Hope Inc. is a manufacturing company that produces fertilizer for various industrial uses. The standard costs for 1 bag of fertilizer is as follows: Per bag Direct materials (5 g @ $4.00/kg) Direct labour (1.5 hrs @ $8.00/hr) Total estimated variable overhead for the year is $1,050,000. Variable overhead is allocated using direct labour hours. Actual results for the last year were: Actual output Direct materials (purchased and used 1,023,000 kg) Direct labour (308,000 hrs worked) Variable overhead Hope expects to work a total of 375,000 direct labour hours per annum. Required: (a) Calculate the following variances: (i) (iii) $ 20.00 12.00 Direct material price, quantity and total variances Direct labour price, quantity and total variances Variable overhead spending, efficiency and total variances (b) Comment on the direct material variances. 220,000 bags $ 4,347,750 2,371,600 954,800