Problem 1 Variance Analysis - 12 marks - 25 minutes Alpha Company uses a standard costing system in their manufacturing facility. The standard and actual data for the last year are presented below. The company expects production to be at their normal capacity of 1,200 units. The company uses machine hours to allocate overhead. Standard cost per unit: Direct material 40 Kg ($2.7 per Kg) Direct labour 8 hours ($18 per hour) Manufacturing Overhead (40% of overhead is fixed) $5 Machine hours 1 Actual data for last year is as follows: Actual variable overhead costs $3,950 Actual direct labour cost (7,500 hours) $137,250 Direct material purchased (42,500 Kg) $118,150 Actual production level 1,050 units Actual machine-hours 1,500 There was no direct material beginning inventory. The ending balance of direct material has 6,500 kg. Required: (make sure to identify whether each variance is favorable or unfavourable) a. What is direct material price variance? b. What is direct material quantity variance c. What is direct labor efficiency variance? d. What is variable overhead rate variance e. What is variable overhead efficiency variance f. What is fixed overhead volume variance