Requirement 1 - Compute the cost and efficiency variances for direct materials and direct labor. Begin the cost variances for each. Select the "shortcut" formula and compute. (Note: you can use the "shortcut" formula or the regular formula to compute the variance) Direct materials cost variance = (AC-SC) x AQ = (1.05-1.10) x 14,400 sq. ft = 720 F Direct labor cost variance = (AC-SC) x AQ = 4. JU Next, compute the efficiency variance for each. Select the "shortcut" formula and compute. (Note: you can use the "shortcut" formula or the regular formula to compute the variance) Direct materials efficiency variance = (AQ-SQ) x SC =5. U