Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Jackson uses the following standards for one

unit of product.

	Standard Quantity	Standard Price or Rate
Direct Materials	5 pounds	$3.60 per pound
Direct Labor	1.25 Hours	$12.00 per Hour

In November 2021, Jackson purchased 125,000 pounds of direct material at a total cost of $475,000. The total factory wages for November were $364,000 and worked 28,000 direct labor hours. The company manufactured 22,000 units of product during May using 108,000 pounds of direct materials.

Required:

A). Compute the cost that should be incurred for the production of 15,000 units. (3 Marks)

B). Calculate the material price variance and the material usage variance and label them as either favourable or unfavourable. (6 Marks)

C). Calculate the Direct Labor Rate variance and the Efficiency variance and label them as either favourable or unfavourable. (6 Marks)

D). If you were to investigate these variances, whom would you first suspect is not doing their job (i.e., Purchasing Manager or Production Manager) and

why? (3 Marks)