PQR Retail sets standard costs for its product as follows:

• Standard quantity: 2,000 units
• Standard cost per unit: $80
• Actual quantity produced: 2,500 units
• Actual cost per unit: $85

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 Retail.
4. Analyze the impact of materials variances on PQR Retail's cost management.
5. Evaluate PQR Retail's use of standard costing for cost efficiency.