My Cola Company (MCC), a company that produces a number of different carbonated caffeinated beverages. The management has gathered data for one of its product lines, Twitch Cola, and wants to complete materials variances. After water, the main ingredient is sugar. For the most recent batch, My Cola Company purchased and used 7400 Kg of sugar, at a price of $4.90 per Kg. The standards call for 6300 Kg and paying $3.25 per Kg.

Using this information, compute the following

1. Materials Price Variance
2. Materials Usage Variance

In addition to the materials variances, the management at My Cola Company would like to determine labour variances for Twitch Cola. For this batch of Twitch Cola, MCC used 1600 labour hours paying a total of $20800. The Standard Hours allowed is 1750. The HR Department has determined that the Standard Labour Rate should be $13.50 per hour.

Using the above information compute the following:

1. The Labour Rate Variance
2. The Labour Efficiency Variance

Correct answers must state whether the Variance is Favorable or Unfavorable. To receive full credit the answer must be labeled as such. For example: An answer such as "- $4000" will not be given full credit, even if the number is correct. The same number shown as "$4000 Favorable" would receive full marks.

"Provide interpretation for each of the calculated variance"