QUESTION $2$: $25$ marks

SHOW ALL SUPPORTING CALCULATIONS FOR THIS PROBLEM. NO MARKS WILL BE AWARDED FOR ANSWERS TO THE PROBLEMS UNSUPPORTED BY CLEARLY SHOWN CALCULATIONS. ROUND ALL CALCULATIONS UP TO TWO DECIMAL PLACES.

Hasak Corp makes $100kg$ containers of vegetable seeds, and has the following unit standard costs for direct materials and direct labour:

Direct materials $(70kg$ @ $$3\mathrm{.}00$ per kg$)$ $$210\mathrm{.}00$

Direct labour $(0\mathrm{.}30$ hours at $$20\mathrm{.}00$ per hour$)$ $$6\mathrm{.}00$

Total standard costs per $100kg$ container: $,$$$216\mathrm{.}00$

The following activities were recorded in June:

$2,100$ containers were manufactured

$85,000kg$ of materials costing $$37,000$ were purchased.

$222,000kg$ of materials were used.

$$27,000$ was paid for $355$ hours of direct labour.

There were neither beginning nor ending WIP inventories on hand.

Required:

a$)$ Compute the direct materials variances. $10$ marks

b$)$ Compute the direct labour variances. $10$ marks

c$)$ Suggest rational explanations for each variance. $5$ marks