Try It! C. Hannah owns a fruit smoothie shop at the local mall. Each smoothie requires Ya pound of mixed berries, which are expected to cost $4 per pound during the summer months. During the month of June, Hannah purchased and used 1,300 pounds of mixed berries at a cost of $3.75 per pound. Hannah's shop sold 5,000 smoothies during the month. 1. Calculate the DM price variance. Is the variance favorable or unfavorable? 2. Calculate the DM quantity variance (also known as a DM efficiency variance). Is the vari- ance favorable or unfavorable? 3. Calculate the total DM variance. Is the variance favorable or unfavorable? Please see page 709 for solutions. Canvas D Question 2 2.5 pts The Ferro Company uses straight-ine depreciation and is considering a capital expenditure of which the following relevant cash flow data have been estimated: Estimated useful life: 3 years Initial investment: $300,000 Savings year 1 Savings year 2 Savings year 3: Residual value after 3 yrs $40,000 $240,000 $130,000 $140,000 Total operating income from the asset over the 3-year period is $260,000. $130,000 $250,000 $210.000