Question 2 (20 marks) Michael Roberts is a cost accountant and business analyst for HP Clothing Company (HPCC), which manufactures expensive T-shirts. HPCC uses two direct cost categories: direct materials and direct manufacturing labor. It allocates manufacturing overhead to production based upon labor hours used. At the beginning of 2020, HPCC dopted the following standards for each T-shirt: Input Direct materials Direct labor Variable overhead Standard Quantity Standard Price Or Hour Or Rate 3.1 kg $9/kg 2 hours $8 /hour 2 hours $5 /hour Actual results for April 2020 were as follows: Production 3,200 T-shirts Direct materials purchased 12,900 kg. at $10 kg Direct materials used 9,000 kg Direct labor 7,200 hours for $59,000 Variable manufacturing overhead $ 35,600 Required: a) Compute the standard variable product cost per unit. (4 marks) b) For the month of April 2020, compute the following variances, indicating whether each is favorable or unfavorable: i. Direct materials price variance, based on purchases (2 marks) ii. Direct materials quantity variance (2 marks) Direct labor rate variance (2 marks) iv. Direct labor efficiency variance (2 marks) V. Variable manufacturing overhead rate variance (2 marks) vi. Variable manufacturing overhead efficiency variance (2 marks) c) Explain the possible reasons of any two unfavorable variances for direct costs and suggest the way to rectify them. (4 marks)