Ronaldo Ltd is a subsidiary of Man United FC Ltd. Ronaldo produced 7,800 soccer balls (one of its several products) during July.

The accounting records indicated the following:

Direct material purchased	25,000 kilograms @ $2.60 per kilogram
Direct material used	23,100 kilograms
Direct labour used	40,100 hours @ $18 per hour

The balls have the following standard prime costs:

Direct material: 3 kilograms @ $2.50 per kilogram	$7.50
Direct labour hours: 5 hours @ $17 per hour	$85.00
Standard prime cost per unit	$92.50

In relation to fixed and variable overheads Ronaldo Ltd has the following standards and flexible budget data for all its products:

Standards and Flexible Budget Data:

Standard variable overhead rate	$18 per direct labour hour
Standard quantity of direct labour	2 hours per unit of output
Budgeted fixed overhead	$300,000
Budgeted output	25,000 units

Actual results for July are as follows:

Actual output	20,000 units
Actual variable overhead	$960,000
Actual fixed overhead	$291,000
Actual direct labour	50,000 hours

Required:

For the month of July, calculate the following variances, indicating whether each is favourable or unfavourable:

A) Direct material and labour variances identifying (calculating) the direct material price and quantity variances and the direct labour rate and efficiency variances separately (4.5 marks)

B) Variable overhead variances identifying (calculating) the spending variance and efficiency variances separately (1.5 marks)

C) Fixed overhead budget variance and the fixed overhead volume variance (1.5 marks)