During June, Andrew Ltd's material purchases amounted to 6500 kilograms at a price of $8 per kilogram. Actual costs incurred in the production of 2000 units were as follows:

Direct labour ............................ $177 375.................... ($27.50 per hour)

Direct material .......................... $34 400 ..................... ($8 per kilogram)

The standards for one unit of Henderson's product are as follows:

Direct labour ___________________________ Direct material

Quantity: 3 hours per unit ......................... Quantity: 2 kilograms per unit

Rate: $27 per hour ....................................... Price: 87.50 per kilogram

Required:

1. Calculate the direct material price and quantity variances and the direct labour rate and efficiency variances. Indicate whether each variance is favourable or unfavourable.

2. Draw diagrams depicting the direct material and direct labour variances, similar to the diagrams in Exhibits 10.3 and 10.5?