The Big Bazinga Company makes molecular models. Budgeted costs to produce a model are as follows:

Input	Quantity	Price	Total Standard Cost
Direct materials	10 kg	$5.00 per kg	$ 50
Direct labour	5 hours	$25 per hour	125

Actual results for the year were as follows:

• Produced 11,000 models
• Direct material purchased:
  • 125,000 kg at $5.20/kg
• Direct materials used:
  • 126,000 kg
• Direct Labour: $1,622,500
• Direct Labour Price (Rate) Variance is $147,500U

Required:

1. Calculate the following:
   1. Direct Material Price (Rate) Variance
   2. Direct Material Quantity (Efficiency)Variance
   3. What was the amount of actual direct labour hours for the year?
   4. Direct Labour Quantity (Efficiency) Variance

2. Give a reason for the Direct Labour Quantity (Efficiency) Variance calculated above.