Smartsets manufactures headphone cases. During September 2018, the company produced and sold 107,000 cases and recorded the following cost data: EClick view the cost data.) e icon Read the requirements 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 (U). (Abbreviations used: AC actual cost; AQ= actual quantity; FOH fixed overhead; SC standard cost; SQ standard quantity.) Formula Variance (AC-SC) x AQ 10650 U Direct materials cost variance 164 U (AQ- SQ)x AC Direct labor cost variance Next compute the efficiency variances. Select the required formulas, compuute 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.) Formula Variance Direct materials efficiency variance Direct labor efficiency variance 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 oost and efficiency varianoes, and identify whether each varianoe is favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost: AQ actual quantity: FOH fixed overhead: SC = standard cost: SQ = standard quantity: VOH = variable overhead.) Formula Varlance VOH cost variance VOH efficiency variance N ou= fived overhead: SC=stondd prtSoet pute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC actual quantity: quantity.) Formula Variance FOH cost variance FOH volume variance Requirement 3. Smartsets's management used better quality materials during September. Discuss the trade-off between the two direct material variances. .They hoped these materials would result Smartsets's management knew that using higher quality materials would result in a(n) more efficient usage than "standard" materials. The result was an overall Standard Cost Information Quantity Cost 2 parts 0.17 per part Direct Materials 7.00 per hour Direct Labor 0.02 hours 11.00 per hour Variable Manufacturing Overhead 0.02 hours Fixed Manufacturing Overhead ($31,040 for static budget volume of 97,000 units and 1,940 hours, or $16 per hour) Actual Cost Information 0.22 per part) $ 46,860 $ Direct Materials (213,000 parts @ $ Direct Labor 7.10 per hour) 11,644 (1,640 hours @ Variable Manufacturing Overhead 10,000 Fixed Manufacturing Overhead 25,000 Print Done