Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (L (Abbreviations used: AC = actual cost; AQ= actual quantity, FOH fixed overhead, SC standard cost, SQ = standard quantity) Direct materials cost variance Direct labor cost variance Formula (AC-SC) - AQ (AC-SC) AQ Variance $ 10,450 U 160 U Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U) (Abbreviations used: AC actual cost; AQ actual quantity: FOH fixed overhead, SC standard cost; SQ standard quantity) Direct materials efficiency variance Direct labor efficiency variance Formula (AQ-80) 50 (AQ-SQ) SC Variance 150 5,000 Requirement 2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances Now compute the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance favorable (F) or unfavorable (U) (Abbreviations used. AC actual cost, AQ actual quantity, FOHxed overhead, SC standard cost BQ standard quantity, VOH variable overhead) VOH cost variance VOH efficiency variance Formula Variance