The following information was obtained from KMG Manufacturing Company.

Standard Data:

Direct material 4 yards @ $4 per yard

Direct labour 3 hours @ $6 per hour

Variable manufacturing overheads $2 per hour

Actual Data:

Direct material 48,000 yards @ $4.20 per yard

Direct labour 34,000 hours @ $5.20 per hour

Variable manufacturing overhead 34,000 hours totalling $80,000

Actual units produced 18,000

Required:

1. Variable Manufacturing Overhead Rate
2. Variable Manufacturing Overhead Efficiency
3. Give One (1) possible cause of an adverse material price variance.