PROBLEM FROM STANDARD COSTING AND VARIANCE ANALYSIS Problem: 2 (5 marks) Cannington Company manufactures a product that has the following standard costs: Direct material: 40 yards at $2.70 per yard $108 Direct labor: 8 hours at 18.00 per hour $144 The following information pertains to July: Direct material purchased: 42500 yards at $2.78 per yard, or $118,150 Direct material used 36,000 yards Direct labor 7,500 hours at $18.30 per hour, or $13,250 Actual completed production 1050 units. Required: Calculate the direct-material price and quantity variances, and the direct-labour rate and efficiency variances. Indicate whether each variance is favourable or unfavourable