Maple Leaves Inc. produces portable ice rinks. The standard cost for one rink is as follows: Direct materials Direct labour Variable manufacturing overhead Total standard cost Standard Quantity Or Hours 1.30 kilograma 0.80 hours Standard Price or Rate 64.00 per kilogram $5.00 per hour Standard Cost $ 5.20 4.00 0.50 machine-hours $2.00 per machine-hour 1.00 $10.20 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. Flexible Budgeted Actual Sales (15,200 rinka) 6456,000 $456,000 Less: Variable expenses: Variable cost of goods sold 155,040 200,329 Variable selling expenses 20,300 20,300 Total variable expenses 175,340 220,629 Contribution margin 280,660 235,371 Less: Fixed expenses: Manufacturing overhead 132,000 132,000 85,120 Total fixed expenses 217,120 85,120 217,120 $63,540 $ 18,251 Selling and administrative Net income *Contains direct materials, direct labour, and variable manufacturing overhead. 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. 30,400 kilograms of materials were purchased at a cost of $3.70 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. 11,900 direct labour-hours were worked at a cost of $8 per hour. d. Variable manufacturing overhead cost totalling $15,849 for the month was incurred. A total of 5,870 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 (l.e., zero variance).) Material price variance