Problem 10-23 Basic Variance Analysis [LO2, LO3, LO4] VitalAid Inc. manufactures a vacuum-sealed high-protein food supplement that it sells to food aid organizations around the world. The company uses variable costing in conjunction with a standard costing system and has established the following standards for one package of VitalAid bars: Standard Standard Price or Standard Quantity or Hours Rate Cost Direct materials 350 grams $ 12.00 per kg $4. 20 Direct labour 0.25 hours 13.00 per hour 3.25 Variable manufacturing overhead 0. 25 hours 1.60 per hour 0.40 Total standard variable cost $7.85 During October, the company recorded the following activity relative to production of VitalAid: a. The company produced 4,000 packages during October. b. A total of 1,800 kilograms of material was purchased at a cost of $19,800. C. There was no beginning inventory of materials; however, at the end of the month, 300 kilograms of material remained in ending inventory. d. The company employs 5 people to work on the production of VitalAid, During October, each employee worked an average of 185 hours at an average rate of $14.00 per hour. e. Variable manufacturing overhead is assigned to VitalAid on the basis of direct labour-hours. Variable manufacturing overhead costs during October totalled $1,850. The company's management is anxious to determine the efficiency of the VitalAid, production activities.Required: 1. For direct materials used in the production of VitalAid: a. Compute the price and quantity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) * Answer is not complete. Materials price variance F Materials quantity variance 2. For labour employed in the production of VitalAid: a. Compute the rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)