Question 1 (21 marks) Yamaya Yoga is a company manufacturing yoga mats to sell to overseas distributors. For the month of October, it expected to manufacture 16,000 mats. The mat normally sells for a wholesale price of $75. The company uses a standard costing system, with standard cost per mat given in the table below: Direct materials, 2.0 kg of rubber at $20/kg $40.00/mat Direct labor, 3 minutes at $60/hour $3.00/mat Variable manufacturing overhead, 3 minutes at $80/hour $4.00/mat The budgeted fixed manufacturing overhead for October was $76,000. The company applies fixed manufacturing overhead to work in process using a predetermined overhead rate per unit based on the expected production level. Because of extra demand due to home-workouts, demand was much higher than expected, and the company made and sold 19,000 mats. The total revenue collected in October was $1,615,000. Rent on the manufacturing plant (included in fixed manufacturing overhead) was reduced from $50,000 to $42,000, while other fixed manufacturing overheads were as expected. The company purchased 38,000 kg of rubber, but actually used only 36,000 kg of the rubber. Other actual costs are shown below: Actual materials purchased $693,500 Actual direct labor cost incurred 1,000 hours @ $65/hour Actual variable manufacturing overhead $75,000 Required: (a) Determine the following variances, and state clearly whether each is favourable or unfavourable: direct materials price, inventory, and quantity variances; (ii) direct labor rate and efficiency variances; (iii) variable overhead rate and efficiency variances; (iv) fixed overhead budget and volume variances; and (v) sales price and sales volume variances. (16 marks)