QUESTION 1 Oberlo Ltd. has the following standard information for its single product: Quantity Standard Price Standard Direct material 8 kilograms per unit $1.50 per kilogram In October 6,000 units were produced. The company purchased 18,000 kilograms of direct materials at a cost of $26,100 and 51,000 kilograms of direct materials were used in production. Required: Calculate the direct material price variance and direct material efficiency variance. Show all workings. Give one possible explanation for each of the two variances you have calculated. You may utilise following formulas: Direct Material Price Variance = (Standard Price - Actual Price] x Quantity Purchased Direct Material Efficiency Variance = [Standard Quantity for Actual Output - Actual Quantity for Actual Output x Standard Price