PROBLEMS 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead a. As shown below, the materials price variance is As shown below, the materials quantity variance is Actual Quantity Standard Materials Costs Actual Materials Costs at Standard Rate (Flexible Budget) = AQ * AP AQ * SP = SQ * SP yards X per yard yards X per yard yards X per yard = = materials price variance AQ X SP yards X per yard = materials quantity variancePROBLEMS (continued) 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) b. As shown below, the labor rate variance is As shown below, the labor efficiency variance is Actual Hours Standard Labor Costs Actual Labor Costs at Standard Rate (Flexible Budget) =AH=x AR AH % SR =SH % SR hours = per hour hours = per hour hours = per hour labor efficiency variance PROBLEMS (continued) 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) c. As shown below, the variable overhead spending variance is As shown below, the variable overhead efficiency variance is Standard Variable Actual Hours Overhead Costs Actual Variable at Standard Rate (Flexible Budget) Overhead Costs AH x SR = SH x SR hours X per hour hours X per hour = = variable overhead variable overhead spending variance efficiency variancePROBLEMS (continued) 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) d. Based on the company's policy, the following variances would be investigated: Direct materials: Direct labor: Variable overhead: e. Possible explanations for the variances identified in requirement d follow. Possible causes of materials price variance: Possible causes of variable overhead spending variance:Bristol Company produces blankets. The master budget shows the following standards information and indicates the company expected to produce and sell 28,000 units for the year. Direct materials 4 yards per unit at $3 per yard Variable manufacturing overhead 2 direct labor hours per unit at $4 per hour Bristol actually produced and sold 30,000 units for the year. During the year, the company purchased 130,000 yards of material for $429,000 and used 118,000 yards in production. A total of 65,000 labor hours were worked during the year at a cost of $637,000. Variable overhead costs totaled $231,000 for the year. For this assignment, complete the following: a. Calculate the materials price variance and materials quantity variance using the format shown in Figure 10.2. Clearly label each variance as favorable or unfavorable. b. Calculate the labor rate variance and labor efficiency variance using the format shown in Figure 10.3. Clearly label each variance as favorable or unfavorable. c. Calculate the variable overhead spending variance and variable overhead efficiency variance using the format shown in Figure 10.4. Clearly label each wvariance as favorable or unfavorable. d. Company policy is to investigate all variances greater than 10 percent of the flexible budget amount for each of the three variable production costs: direct materials, direct labor, and variable overhead. Identify which of the six variances calculated in requirements a through should be investigated. e. Provide two possible explanations for each variance identified in requirement d. Here's a worksheet you may use for this assignment. Note there are multiple tabs: Variance Analysis for Direct Materials, Direct Labor and Overhead.xlsx. This assignment measures your ability to implement managerial accounting concepts that you learned about in chapter 10 of our course text