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Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company

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Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 116,000 liters at a budgeted price of $195 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor (2 pounds $12) (0.5 hours # $40) $24 20 Variable overhead is applied based on direct labor hours. The variable overhead rate is $100 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $50 per unit. All non-manufacturing costs are fixed and are budgeted at $2 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $606,000 unfavorable. The following is the actual income statement (in thousands of dollars) for the year. $21, 718 Sales revenue Les variable costs Direct materials Direct labor Variable overhead Total variable conta Contribution margin Less fixed costs Pixed manufacturing overhead Non-manufacturing conta Total fixed costs Operating profit 2,368 2,210 5,230 59,808 $11,910 1,230 1.310 $ 2,440 $ 9,470 During the year, the company purchased 192,000 pounds of material and employed 48,400 hours of direct labor Operating profit $ 9,470 During the year, the company purchased 192,000 pounds of material and employed 48,400 hours of direct labor. Required: a. Compute the direct material price and efficiency variances. b. Compute the direct labor price and efficiency variances. c. Compute the variable overhead price and efficiency variances. (For all requirements, enter your answers in whole dollars. Indicate the effect of each variance by selecting "F "U" for unfavorable. If there is no effect, do not select either option.) Direct materials: Price variance Efficiency variance b. Direct labor Price variance Efficiency variance Variable overhead: Price variance Efficiency variance C

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