LIBRARY ONE UNIT OF PRODUCT Direct materials: 2 pounds x $50 per pound Direct labour: 1.5 hours x $20 per hour Variable overhead: 1.5 hours x $10 per hour Total standard variable cost per unit The company records materials price variances at the time of purchase. The following activities occurred during the month of February: Materials purchased Materials used Units produced Direct labour 3,000 pounds at $48 per pound 2,100 pounds 1,000 units 1,400 hours at $25 per hour $100.00 30.00 15.00 $145.00 BSITE LIBRARY Calculate the following variances and indicate if they are favourable (F) or adverse (A): Material price 1. 11. Material usage III. Total material IV. Labour rate V. Labour efficiency VI. Total labour [2.5 marks] [3 marks] [1 mark] [2.5 marks] [3 marks] [1 mark] C. Provide one (1) possible cause for each of the variances calculated in B above for: 1. Material price 11. Material usage Labour rate IV. Labour efficiency [1 mark] [1 mark] [1 mark] [1 mark]