Wagatha's Inc. makes homemade dog biscuits. They made 700 batches of biscuits last month and their standard costs are as follows:

STANDARD Quantity per batch Price Direct Materials 3 lbs per batch $5 per pound Direct Labor 2 hrs per batch $18 per hour

a.) The actual amount of direct materials (biscuit mix) purchased and used last month was 2,000 pounds. The average price paid was $5.25 per pound. Calculate the direct materials price and quantity variances. Discuss some reasons for these variances.