In connection with their planning process, the company carefully established the following per$-$unit standards for direct materials and direct labor:

While many different levels of sales were considered, based on careful market studies and projections, the company prepared a master budget based on a final estimates production of $15,000$ units for the period.

REQUIRED:$20)$ Okay $...$ let$$s do the numbers. Remember that the actual cost of DM was $$1,185,000.$ Let$$s say that was $118,500$ pounds @ and average cost of $$10$ per pound. Also, let$$s assume that the $$278,000$ actual cost of direct labor was $22,240$ hours @ an average cost of $$12\mathrm{.}50$ per hour

For materials, let$$s break down the flexible budget variance of $$15,000$ U into its $2$ components. Let$$s figure out how much of this difference is caused by the price $($price variance$)$ and how much is caused by the usage of materials $($usage variance or quantity variance$).$

$21$ For labor, let$$s break down the flexiblebudget variance of $$8,000$ U into its $2$ components. Let$$s figure out how much of this difference is caused by the labor rate $($rate variance$)$ and how much is caused by the hours used $($efficiency variance$).$