Softlux Inc. is a carpet manufacturer. For June 2020, the company had the following standards for one of its product lines: decorative mats.

Units produced 2,000

Direct materials per mat (in kilograms) 3

Cost per kilograms of direct materials $22.50

Standard direct manufacturing labour cost (per hour) $20.00

Standard manufacturing labour time (hours per mat) 2

The following data were compiled regarding actual performance:

Direct materials used (in kilograms) 6,400

Direct materials purchased (in kilograms) 6,500

Cost per kilogram of direct materials $24.00

Direct manufacturing labour hours 3,900

Total direct manufacturing labour cost $87,750

Required:

(A) Compute the materials price variance and the materials usage variance, and indicate whether the variance is favourable or unfavourable.

(B) Compute the labour rate variance and the labour efficiency variance, and indicate whether the variance is favourable or unfavourable.

(C) For each variance, provide a plausible explanation of why the variance occurred.