Maple Leaves Inc. produces portable ice rinks. The standard cost for one rink is as follows: Hours Standard Cost Standard Quantity or Direct materials 1.40 kilograms Standard Price or Rate $4.00 per kilogram $ 5.60 Direct labour 0.90 hours $7.00 per hour 6.30 Variable manufacturing overhead 0.30 machine-hours $2.00 per machine-hour 0.60 Total standard cost $12.50 59.25 The plant has been having problems for some time, as is shown by its December income statement when it produced and sold 15.200 rinks; the normal amount is 15,350 rinks per month. Fixed costs are allocated using machine-hours. Sales (15,200 rinks) Less: Variable expenses: Variable cost of goods sold" Variable selling expenses Total variable expenses Contribution margin Less: Fixed expenses: Manufacturing overhead Selling and administrative Total fixed expenses Net income Flexible Budgeted $ 456,000 Actual $ 456,000 190,000 205,690 20,300 20,300 210,300 225,990 245,700 230,010 132,000 132,000) 85,120 217,120 85,120 217,120 $ 28,580 $ 12,890 "Contains direct materials, direct labour, and variable manufacturing overhead Help Save & Exit Submit 58.50 Madison Eastwood, the general manager wants to get things under control. She needs information about December operations since the income statement showed that the problem could be due to the variable cost of goods sold. Eastwood learns the following about operations and costs in December: a. 31,100 kilograms of materials were purchased at a cost of $3.90 per kilogram. b. 24,600 kilograms of materials were used in production (Finished goods and work-in-process inventories are insignificant and can be ignored.) c. 11,600 direct labour-hours were worked at a cost of $8 per hour. d. Variable manufacturing overhead cost totalling $17,600 for the month was incurred. A total of 4,400 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for December a. Direct materials price and quantity variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e.. zero variance).) Material price variance Material quantity variance Prey 1 of 17 Next > 9:03 AM ENG b. Direct labour rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Labour rate variance Labour efficiency variance c. Variable overhead spending and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Variable overhead spending variance Variable overhead efficiency variance