Question 5 The Litton Company has stablished standards for each unit of its one product as follows Standard Quantity Standard Price 3 Kgs 2 Hrs Standard cost Direct Material Direct Labour Variable MOH $4.00/Kg $5.00/hr $5.50/hr $12.00 $16.00 $10.00 2 DL hours Actual production figures for the past year are given below. Units Produced DM used DM cost DL used DL cost Variable MOH cost 600 2,000 kg $7,600 1,100 Hours $9,240 $5,720 The company applies very will manufacturing overhead to products on the basis of direct labour hours. Required: Note that you must identify each variance as Favorable (F) or Unfavorable (U). 1. For direct materials calculate a. The price (rate) variance b. The quantity variance 2. For Direct Labour calculate a. The Rate variance 4