Question 2: Liquid Company manufactures a single product that has a standard materials cost of $20 (2 units of raw materials at $10 per unit), standard direct labor cost of $18 (1 hour per unit), and standard variable overhead cost of $8 (based on direct labor-hours). Fixed overhead is budgeted at $34,000 per month. The following data pertain to operations for May of this year: Raw materials purchased 3,600 units costing $31,620 Raw materials used in production of 1,500 units of finished product raw materials Direct labor used 1,500 hours costing $30,000 Variable overhead costs incurred Fixed overhead costs incurred Required: $11,920 $35,000 Compute the following variances (show calculations): Materials quantity variance Labor rate variance a. 1. 2. 3. Labor efficiency variance 4. 5. 6. 3.200 units of b. Variable overhead spending variance Variable overhead efficiency variance Fixed overhead budget variance Give one possible explanation for each of the six variances computed in requirement (a).