Requirements1. Compute DM efficiency variance and DM sales volume variance

Evergreen, Inc., has the set the following standards for direct materials and direct manufacturing labor for each 25 lb. bag of chemical fertilizer it produces: Direct Materials: 31.25 pounds of XF/2000 $0.10 Direct Labor: 0.0625 hours $40.00 per hour The company had planned to produce 2,000,000 pounds of the fertilizer during February 2017, but manufactured 25% more fertilizer than planned, using 3, 375,000 pounds of XF/2000 and 6, 500 direct manufacturing labor hours. The company purchased 3, 750,000 pounds of XF/2000 at $0.0937 per pound and incurred a total payroll of $227, 500 for direct labor during the month. The company uses standard costing, and thus identifies all variances at time incurred (ie: time of purchase, time of use, etc.)