Michiana Company's Benton Harbor Plant produces precast ingots for industrial use. Angelo Lorenzo, who was recently appointed general manager of the Benton Harbor Plant, has just been handed the plant's contribution format income statement for October. The statement is shown below:

$\backslash$table$[[$Budgeted Actual,,$],[$Sales $(8,000$ ingots$),$$$265,000,265,000]]$

Variable expenses:

Variable cost of goods $,88,960,106,490$ sold$*$

Variable selling expenses $,16,000,16,000$

Total variable expenses

Contribution margin

$160,040,142,510$

Fixed expenses:

Manufacturing overhead $,65,000,65,000$

Selling and administrative $,80,000,80,000$

Total fixed expenses

$145,000,145,000$

Net operating income $($loss$)$ $$,15,040$$$(2,490)$

Mr$.$ Lorenzo was shocked to see the loss for the month, particularly because sales were exactly as budgeted. He stated, "I sure hope the plant has a standard cost system in operation. If it doesn't, I won't have the slightest idea of where to start looking for the problem."

The plant does use a standard cost system, with the following standard variable cost per ingot:

$\backslash$table$[[,\backslash$table$[[$Standard$],[$Quantity$],[$or Hours$]],\backslash$table$[[$Standard Price$],[$or Rate$]],\backslash$table$[[$Standard$],[$Cost$]]],[$Direct materials,$3\mathrm{.}0$ pounds,$\{$f$9$b$7$bd$72$f$-$c$914-463$f$-9503-7228$fe$95$e$828\}$

$\backslash$table$[[2\mathrm{.}50$ per$],[$pound$]],$$$7\mathrm{.}50$

Required:

Assume that the company recognizes price variances when materials are purchased. Compute the following variances for October:

a$.$ Direct materials price and quantity variances. $($Input all amounts as positive values. Indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

$\backslash$table$[[$Materials price variance,,$],[$Materials quantity variance,,$]]$

b$.$ Direct labor rate and efficiency variances. $($Input all amounts as positive values. Indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

$\backslash$table$[[$Labor rate variance,$],[$Labor efficiency variance,$]]$

c$.$ Variable overhead rate and efficiency variances. $($Input all amounts as positive values. Indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

$\backslash$table$[[$Variable overhead rate variance,,$],[\backslash$table$[[$Variable overhead efficiency$],[$variance$]],,]]$

Summarize the variances that you computed in $(1)$ above by showing the net overall favorable or unfavorable variance for October. $($Input all amounts as positive values. Indicate the effect of variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

Pick out the two most significant variances that you computed in $(1)$ above. $($You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.$)$

Materials price variance

Materials quantity variance

Variable overhead efficiency variance

Labor rate variance

Variable overhead rate variance

Labor efficiency variance