Question 2 Direct Material and Labour Variance: Manufacturer 10 marks During September, Wonderland Ltd material purchases amount to 7,000 kilograms at a price of $8.00 per kg. Actual costs incurred in the production of 2,700 units were as follows: Direct labour Direct material $118,611 $51,000 $19.10 per hour $8.00 per kilogram The standard for one unit of product is as follows: Direct Labour Direct material Quantity 2.5 hours per unit 2.5 kilograms per unit Price/Rate $21 per hour S7 per kilogram Required: Calculate the following variance, indicating whether each variance is favorable or unfavorable: (a) Direct material price variance. (2 % marks) (b) Direct material quantity variance. (2 % marks) (c) Direct labour efficiency variance. (2 marks) (d) Direct labour rate variance. (2 % marks) 2