More requirements C) brief discuss how could GSM furnishers use the variance information for managerial performance evaluation

QUESTION 2 (14 marks) Consider the following direct labour costs data regarding the manufacture of a line of sofas by Glorious Sofa Manufacturer (GSM): Standards per sofa Direct 0.5 hours of input at $20 manufacturing per hour labour The following data were compiled regarding actual performance: Actual output units 20,000 sofas produced Direct manufacturing $209,000 labour costs Actual manufacturing 11,000 hours hours Labour price per hour $19.00 Required: (a) Calculate price variance for direct labour cost and identify whether a variance is favourable or unfavourable. (Please note, no marks will be awarded if your identification of variance is incorrect). Show your workings. (2 marks) (b) Calculate efficiency variance for direct labour cost and identify whether a variance is favourable or unfavourable. (Please note, no marks will be awarded if your identification variance is incorrect). Show your workings. (2 marks)