Problem 25-3A (Essay) Rudd Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2017, 11,250 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,000 direct labor hours. All materials purchased were used. Cost Element Standard (per unit) Actual Direct materials & yards at $4.40 per yard $375,575 for 90,500 yards ($4.15 per yard) Direct labor 1.2 hours at $13.40 per hour $200,925 for 14,250 hours ($14.10 per hour) Overhead 1.2 hours at 56.10 per hour (fixed $3.50; variable $2.60) $49,000 fixed overhead $37,000 variable overhead Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $19,000, and budgeted variable overhead was S35,400. The total, price and quantity variances for materials and labor as follows: (1) (2) Total materials variance Materials price variance Materials quantity variance Total labor variance Labor price variance Labor quantity variance Total overhead variance $20,425 Favorable $22,625 Favorable $2,200 Unfavorable $20,025 Unfavorable $9,975 Unfavorable $10,050 Unfavorable $3,650 Unfavorable (3) Which of the materials and labor variances should be investigated if management considers a variance of more than 4% from standard to be significant