Utease Corporation has several production plants nationwide. A newly opened plant in Dubuque produces and sells one product. The plant is treated, for responsibility accounting purposes, as a profit center. The unit standard costs for a production unit, with overhead applied based on direct labor hours, are as follows.

Manufacturing costs (per unit based on expected activity of 35,000 units or 45,500 direct labor hours):

Direct materials (2.0 pounds at $12)	$	24.00
Direct labor (1.3 hours at $80)		104.00
Variable overhead (1.3 hours at $10)		13.00
Fixed overhead (1.3 hours at $20)		26.00
Standard cost per unit	$	167.00
Budgeted selling and administrative costs:
Variable	$	3		per unit
Fixed	$	1,600,000

Expected sales activity: 31,000 units at $300 per unit

Desired ending inventories: 18% of sales

Assume this is the first year of operations for the Dubuque plant. During the year, the company had the following activity.

Units produced		34,000
Units sold		32,500
Unit selling price	$	295
Direct labor hours worked		43,700
Direct labor costs	$	3,539,700
Direct materials purchased		72,000		pounds
Direct materials costs	$	864,000
Direct materials used		72,000		pounds
Actual fixed overhead	$	1,300,000
Actual variable overhead	$	355,000
Actual selling and administrative costs	$	1,793,000

In addition, all over- or underapplied overhead and all product cost variances are adjusted to cost of goods sold.

Comprehensive Problem 6 (Algo) Part d

d. Find the direct materials variances (materials price variance and quantity variance). (Indicate the effect of each variance by selecting Favorable, Unfavorable, and "None" for no effect (i.e., zero variance).)