Question 5 Spike Limited manufactures and sells good quality leather bound diaries. The company uses standard costing to control its costs. The direct materials and direct labour standards for one unit are given below: Standard cost for each unit of the product Direct materials (5 kg at 10 per kg) Direct labour (6 hours at 8 per hour) 50 48 In October, a total of 2,000 units were actually produced at the following costs: Actual Cost Direct materials (8,000 kg at a cost of 9 per kg) Direct labour (10,000 hours at 10 per hour) 72,000 100,000 Required: a) Calculate price and quantity variances for direct materials. (5 marks) b) Calculate rate and efficiency variances for direct labour. (5 marks) (Total: 10 marks)