Aunt Molly's Old Fashioned Cookies bakes cookies for a chain of retail stores. The company's best-selling cookie is Chocolate Nut Supreme, which is marketed as a gourmet cookie and regularly sells for $9.60 per kilogram. The standard input cost per kilogram of Chocolate Nut Supreme, based on Aunt Molly's normal monthly production of 400,000 kilograms, is calculated as follows:

Aunt Molly's management accountant, Karen Blair, prepares monthly budget reports based on these standard costs. Presented here is April's report, which compares budgeted and actual performance.

Required
1. Compute the following variances:
a. Selling-price variance.
b. Material-rate variance.
c. Material-efficiency variance.
d. Labour-rate variance.
e. Labour-efficiency variance.
2. What explanations might exist for the variances in requirement 1?

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Unit Cost Total Cost Cost Item Standard Quantity Direct materials: Cookie mix Milk chocolate Almonds 1,000 grams 1 kilogram 625 grams 312.5 grams 62.5 grams S0.384 per kilogram S2.88 per kilogram S9.60 per kilogram $0.24 0.90 0.60 $1.74 Direct labour $17.28 per hour $21.60 per hour $0.288 0.720 $1.008 1 minute Mixing Baking 2 minutes Performance Report April 2015 Budget Actual Variance Units (in kilograms)* Revenue Direct material Direct labour *Units produced and sold 400,000 450,000 S4,266,000 1,017,365 453,600 50,000 F $426,000 F 321,365 U 50,400 U S3,840,000 696,000 403,200 Usage Report April 2015 Cost Item Quantity Actual Cost Direct materials: Cookie mix Milk chocolate Almonds 1,000 grams 1 kilogram 290,000 kilograms 161,720 kilograms 29,688 kilograms $111,360 621,005 285,000 Direct labour Mixing Baking 450,000 minutes 800,000 minutes 129,600 288,000