Litmus Ltd uses a standard costing system. The company allocates overhead on the basis of machine hours. The standard direct labour hours was 3 hours per unit, whereas the standard labour rate was $12.00 per labour hour.

The purchasing manager reported that the actual purchase price of the materials was $3.50 per kg. The actual hours worked by the company for the same period was 220,000 labour hours. The company's actual wage rate for the period was $11.00 per labour hour.

The company record shows that the standard quantity of direct materials was 2 kg per unit.

During the month, actual direct materials purchased and used by the company amounted to 160,000 kg. Litmus's actual variable overhead cost for the month amounted to $350,000.

The actual total machine hours for the period was 170,000 machine hours. The production cost report shows that the standard price of materials was $3.00 per kg. The standard machine hour for each unit of the product is 2.5 machine hours and the variable overhead rate is $2.00 per machine hour. The actual production for the month of Oct was 75,000 units.

(a) Calculate the following variances :

(i) All necessary direct material variances

(ii) All necessary direct labour variances

(iii) All necessary variable overhead variances

(b) Comment and discuss on all variances computed above. (9 marks