Portland Company's Ironton Plant produces precast ingots for industrial use. Carlos Santiago, who was recently appointed general manager of the Ironton Plant, has just been handed the plants contribution format income statement for October. The statement is shown below: Budgeted Actual Sales (5,000 ingots) $ 260,000 $ 260,000 Variable expenses: Variable cost of goods sold* 84,500 98,865 Variable selling expenses 17,000 17,000 Total variable expenses 101,500 115,865 Contribution margin 158,500 144,135 Fixed expenses: Manufacturing overhead 65,000 65,000 Selling and administrative 83,000 83,000 Total fixed expenses 148,000 148,000 Net operating income (loss) $ 10,500 $ (3,865) *Contains direct materials, direct labor, and variable manufacturing overhead. Mr. Santiago 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: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 3.3 pounds $ 2.80 per pound $ 9.24 Direct labor 0.8 hours $ 7.40 per hour 5.92 Variable manufacturing overhead 0.6 hours* $ 2.90 per hour 1.74 Total standard variable cost $ 16.90 *Based on machine-hours. During October the plant produced 5,000 ingots and incurred the following costs: a. Purchased 21,500 pounds of materials at a cost of $3.25 per pound. There were no raw materials in inventory at the beginning of the month. b. Used 16,300 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 4,600 direct labor-hours at a cost of $7.10 per hour. d. Incurred a total variable manufacturing overhead cost of $10,890 for the month. A total of 3,300 machine-hours was recorded. It is the companys policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for October: a. Direct materials price and quantity variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Materials price variance $ Materials quantity variance $ b. Direct labor rate and efficiency variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Labor rate variance $ Labor efficiency variance $ c. Variable overhead rate and efficiency variances. (Input all amounts as positive values. Do not round your intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Variable overhead rate variance $ Variable overhead efficiency variance $ 2a. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for October. (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) Net variance $