Topline surf Boards manufactures a single product. The standard cost of one unit of this product is as follows

Direct materials 6 feet at $1$6

Direct labor:1 hour at $ 4.50$4.50

Variable manufacturing overhead: 1 hour at $ 3.$3.00

Total standard variable cost per unit$13.5

During October 6000 units were produced. Selected cost data relating to the month's production is as follows

Material purchased: 60000 feet at $0.95 per feet$57000

Materials used in production: 38000 feet?

Direct labor? Hour at $? Per hour27950

Variable manufacturing overhead cost incurred$20475

Required:

Compute

a.Materials quantity variance

b.Materials price variance

c.Labor efficiency variance

d.Labor rate variance

Also discuss the utility of budget and its use in service industry