Standard Cost: Direct materials, 40lbs @ 6.50/lb $260 Direct Labor 2.00hr @ $13.00/hr $26 Overhead at $15.00 per kayak $15 total...................................................... $301 Actual results: Direct materials purchased and used 14000lbs @ $5.00/lb Direct labor 620 @ $11.60/hr Actual Overhead $4860 Kayak company makes plastic kaykas. The over head reates assume production of 350 kayaks per month. The overhead cost function is $2170+(8.80xnumber of kayaks). During March, Shorline produced 300 kayaks . Requirement 1. Compute material, labor, and overhead variances. (Enter all amounts as positive numbers.) Begin by calculating the price variance for materials. First enter the formula, then compute the variance. Be sure to label the variance as favorable (F) or unfavorable (U). Material ( -. ) x = price variance ( - ) x = Calculate the quantity variance for material. First enter the formula, then compute the variance. Be sure to label the variance as favorable (F) or unfavorable (U). Material ( -. ) x = quantity variance ( - ) x = Next, calculate the labor rate variance. First enter the formula, then compute the variance. Be sure to label the variance as favorable (F) or unfavorable (U). Labor ( -. ) x = rate variance ( - ) x = Calculate the labor quantity variance. First enter the formula, then compute the variance. Be sure to label the variance as favorable (F) or unfavorable (U). Labor ( -. ) x = quantity variance ( - ) x = Finally, calculate the total overhead spending variance. First enter the formula, then compute the variance. Be sure to label the variance as favorable (F) or unfavorable (U). (Round your answers to the nearest cent.) Total overhead -. = spending variance - = Requirement 2. Interpret the variances. (Enter all amounts as positive numbers.) The person in charge of purchasing ▼ overspent saved money by purchasing materials $ nothing per pound ▼ above below standard cost. However, ▼ less more material was used. The net effect was a(n) ▼ favorable unfavorable variance of $ nothing. There was ▼ a savings an excess cost on labor because the average wage rate was ▼ below higher than standard. However, ▼ less more than the standard amount of labor was used. The net effect was a(n) ▼ unfavorable favorable variance of $ nothing. Overhead costs were ▼ less than more than would be expected for the production of kayaks. Requirement 3. Suppose the cost function for variable overhead was per labor hour instead of per kayak. Compute the variable-overhead efficiency variance and the total overhead spending variance. Would these variances lead you to a different interpretation of the overhead variances from the interpretation in requirement 2? Explain. (Enter all amounts as positive numbers.) Compute the variable-overhead efficiency variance. First enter the formula, then compute the variance. Be sure to label the variance as favorable (F) or unfavorable (U). Variable-overhead ( -. ) x = efficiency variance ( - ) x = Compute the total overhead spending variance. First enter the formula, then compute the variance. Be sure to label the variance as favorable (F) or unfavorable (U). (Round your answers to the nearest cent.) Total overhead -. = spending variance - = Would these variances lead you to a different interpretation of the overhead variances from the interpretation in requirement 2? Explain. The variable overhead efficiency variance indicates that $ nothing of overhead costs were incurred because ▼ less more labor hours were used than the standard. Control of overhead itself was ▼ good poor as shown by the ▼ favorable unfavorable overhead spending variance.