Given the following data:

Direct Direct

Material Labor

Standard

Standard price per unit of input $10 per foot $10 per hour

Standard inputs allowed per unit of output 5 feet 3 hours

Actual:

Actual price per unit of input $12 per foot $9 per hour

Actual units of input 2,300 feet 1,350 hours

Actual units produced was 500 units

Required:

Calculate the following variances and indicate whether they are favourable or unfavourable:

I. Material price [2.5 marks]

II. Material usage [3 marks]

III. Total material variance [2 marks]

IV. Labour rate [2.5 marks]

V. Efficiency variances [3 marks]

VI. Total labour variance [2 marks]

List three reasons for an unfavourable price variance and state the department/manager that is responsible for such variance. [4 marks]