MakeItSmart Ltd manufactures a single product, Magicputter. The standard cost specification sheet shows the following standards for one unit of Magicputter:

3kg of raw material @ $8 per kg $24

2 hours of direct labour @ $15 per hour $30

A total of 5,800 Magicputters were produced during July.

Actual costs incurred during July were:

20000 kg of raw material were purchased @ $8.50 per kg

17300 kg of raw material were used.

12000 direct labour hours were worked at an average wage rate of $15.50 per hour

Required:

1. Compute the following variances for the month of July. (10 marks - 2.5 marks each)
2. Direct material price variance
3. Direct material quantity variance
4. Direct labour rate variance

Direct labour efficiency variance