The company carries no inventories. The master budget calls for the company to mamufacture

and sell $125,000$ cases at a budgeted price of $$60$ per case this year. The standard direct cost

gheet for one case of pet food follows:

Direct materials $(3$ pounds $9$$$2$

Direct labor hours o $$32$

Variable overhead is applied based on direct labor$-$hours. The variable overhead rate is $$16$ per

direct labor$-$hour. The fixed overhead rate $($at the master budget level of activity$)$ is $$10$ per unit.

All nonmanufacturing costs are fixed and are budgeted at $$2\mathrm{.}2$ million for the coming year.

At the end of the year, the costs analyst reported that the sales activity variance for the year was

$$336,000$ favorable.

The following is the actual income statement $($in thousands of dollars$)$ for the year for Golden

Food Products:

Sales reverue

$$12,800$

Less variable costs

Contribution maxgin

Less fixed costs

During the year, the compary purchased $325\frac{,}{b}ar(000)$ pounds of material and employed $33,900$ hours

of direct labor.

Required:

a$.$ Compute the direct materials price and efficiency variances.