PQR Manufacturing sets standard costs for its product as follows:

• Standard quantity: 1,000 units
• Standard cost per unit: $50
• Actual quantity produced: 1,200 units
• Actual cost per unit: $55

Requirements:

1. Calculate the materials price variance and materials quantity variance.
2. Determine whether the variances are favorable or unfavorable.
3. Discuss the causes of materials variances at PQR Manufacturing.
4. Analyze the impact of materials variances on PQR Manufacturing's cost management.
5. Evaluate PQR Manufacturing's use of standard costing for cost efficiency.