Required: Make sure you do not forget to label each variance U or F. You need to use cell references for your calculations. 1 Calculate the direct materials price and quantity variance. Material price variance should be based on material purchased, since you want to isolate the variance as soon as possible. Material Quantity variance should be based on materials used, since this is monitoring the production efficiency. Material purchase price variance Material Quantity variance 2. Calculate the direct labor rate and efficiency variances. Labor rate variance Labor Efficiency variance 3. Variable manufacturing overhead spending and efficiency variances. Variable overhead spending variance Variable overhead efficiency variance 4. Fixed manufacturing overhead budget variance. Fixed Manufacturing overhead budget variance