Nathan Products Ltd produced 20,000 kitchen utensil sets during October 2022. Records of the business show the following actual data:

Direct materials purchased	50,000	Kilograms @ $10 per kg
Direct materials used	38,000	Kilograms
Direct labour used	28,000	Hours @ $22 per hour

The standard prime cost for a single appliance is presented as follows:

Direct materials: 2 Kilograms @ $8 per kilogram	$16.00
Direct labour: 1.5 hours @ $20 per hour	$30.00
Standard prime cost per unit	$46.00

You have been assigned the task of preparing performance analysis by conducting variance analysis for the month of October. Your report will help the company to control its activities and costs. Your analysis should indicate the possible causes for each variance so that management could take the necessary steps to address the underlying problems.

Required:

Calculate the following variances and indicate whether each result is favourable or unfavourable. Show all the relevant formulas and computations for each part.

1. Calculate Direct Materials variances:

(i) Direct Materials price variance

(ii) Direct Materials quantity variance

(iii) Explain the meaning of the computed values under '1' (i) and (ii); alsohighlight the likely cause(s) for each variance. (hint: answer to this part shouldreflect the condition displayed by the computed variances)

2. Calculate Direct Labour variances:

(i) Direct Labour rate variance

(ii) Direct Labour efficiency variance

(iii) Explain the meaning of the computed values under '2' (i) and (ii); alsohighlight the likely cause(s) for each variance. (hint: answer to this part shouldreflect the condition displayed by the computed variances)