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

Direct materials: 2 metres at $3 per metre $6.00

Direct labour: 1 hour at $4.50 per hour 4.50

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

Fixed manufacturing overhead: 1 hour at $5 per hour 5.00

Total standard variable cost per unit $18.50

During October, 6,000 units were produced. Selected data relating to the months production follow:

Materials purchased: 20,000 metres at $2.85 per metre $57,000

Materials used in production: 12,650 metres ---

Direct labour: ? hours at $ ? per hour $27,950

Variable manufacturing overhead cost incurred $20,475

Variable manufacturing overhead efficiency variance $1,500 U

Denominator level of activity for October 6,200 hours

Fixed manufacturing overhead budget variance 1,000 U

There was no beginning inventory of raw materials. The variable and fixed manufacturing overhead rates are based on direct labour-hours.

Required:

1. For direct materials:

a. Compute the price and quantity variances for October. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

b. Prepare journal entries to record activity for October.

2. For direct labour:

a. Compute the rate and efficiency variances for October. (Indicate the effect variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

b. Prepare a journal entry to record labour activity for October.

3. For variable manufacturing overhead:

a. Compute the spending variance for October, and verify the efficiency variance given above. (Indicate the effect variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

4. For fixed manufacturing overhead:

a. Compute the volume variance for October. (Indicate the effect variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

b. Compute actual costs for October.