The following data is given for the SMU Company:

Budgeted production 26,000 units

Actual production 27,500 units

Materials:

Standard price per ounce $6.50

Standard ounces per completed unit 8

Actual ounces purchased and used in production 228,000

Actual price paid for materials $1,504,800

Labor:

Standard hourly labor rate $22 per hour

Standard hours allowed per completed unit 6.6

Actual labor hours worked 183,000

Actual total labor costs $4,016,850

Required:

a. Calculate the materials variances and indicate whether they are favorable or unfavorable: [6 points]

b. Calculate the labor variances and indicate whether they are favorable or unfavorable: [6 points]