Tractor Corporation produces toy tractors. The company uses the following direct cost categories:

Category	Standard Inputs for 1 output	Std. Cost per input
Direct Materials	4.00	$12.50
Direct Labour	1.40	9.50
Direct Marketing	0.54	5.50

Actual performance and budgeted performance for the company is shown below: Actual output: (in units) 5,000 Direct Materials:

Materials costs	$299,000
Input purchased and used	23,000
Actual price per input	$13.00

Direct Manufacturing Labour:

Labour costs	$ 95,000
Labour-hours of input	9,500
Actual price per hour	$10.00

Direct Marketing Labour:

Labour costs	$ 40,000
Labour-hours of input	5,000
Actual price per hour	$ 8.00

Question 1: What is the price variance of the direct materials?

		a) $10,175 unfavourable
		b) $15,213 favourable
		c) $16,875 favourable
		d) $11,500 favourable
		e) $11,500 unfavourable

Question 2: What is the direct manufacturing labour efficiency variance?

		a) $500 favourable
		b) $672 favourable
		c) $500 unfavourable
		d) $28 favourable
		e) $672 unfavourable