QUESTION TWO: (30 marks) Riley Company produces and sells a single product with budgeted or standard unit costs as follows: Standard Cost $22 Inputs Direct materials Direct labor Variable overhead Fixed overhead Total unit cost Standard Quantity 2 gallons 3 hours 3 hours 3 hours 42 120 180 5364 During April 1,100 units were manufactured and 1,000 units were sold at a sales price of $650. Actual results for April were as follows: Direct materials purchased 2,400 gallons at sto per gallion Direct materials used 2,340 gallons Direct laborused 3,480 hours at $15.20 per hour Variable overhead costs incurred $135,600 Fixed overhead costs incurred $183,500 Instructions: Compute the following variances and indicate whether the variances are favourable or unfavourable, and if unfavourable explain why. () Direct materials price variance. Page 3 of 6 EXAMINATION QUESTION BOOKLET (b) Direct materials quantity variance (c) Direct labour rate variance (d) Direct labour efficiency variance