Ying Zsoa recently became the controller of a joint venture in Hong Kong. He has been using standard costing to plan and control the company’s activities. In a meeting with the budget team, which includes managers and employees from purchasing, engineering, and production, Zsoa asked the team members to share any operating problems that they had encountered during the last quarter. He explained that his staff would use this information in analyzing the causes of significant cost variances that had occurred in the quarter. For each of the following situations, identify the direct materials and/or direct labor variance(s) that could be affected and indicate whether the variances are favorable or unfavorable:

1. The production department used highly skilled, higher-paid workers.

2. Machines were improperly adjusted.

3. Direct labor personnel worked more carefully to manufacture the product.

4. The product design engineer substituted a direct material that was less expensive and of lower quality.

5. The Purchasing Department bought higher-quality materials at a higher price.

6. A major supplier used a less-expensive mode of transportation to deliver the raw materials.

7. Work was halted for two hours because of a power disruption.