Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller.

Direct Labor:Direct Material:Quantity, 0.24 hourQuantity, 3 kilogramsRate, $12.00 per hourPrice, $0.58 per kilogram

Actual material purchases amounted to 159,600 kilograms at $0.630 per kilogram. Actual costs incurred in the production of 38,000 units were as follows:

Direct labor:$116,850 for 9,500 hoursDirect material:$79,002 for 125,400 kilograms

Required:

1. Use the variance formulas to compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)
2. construct the excel spread sheet and how the answer would change if the labor rate is changed ot $15 and direct material cost to $0.79 per kg.