Question 3. Lukaku manufactures a single product in which variable manufacturing overhead is assigned on the basis of direct labor hours. The company uses a standard cost system and has established the following standards for one unit of product: Standard Standard Price Standard Quantity or Rate Cost Direct materials 1.5 pounds $3.00 per pound $4.50 Direct labor 0.6 hours $6.00 per hour $3.60 Variable manufacturing overhead 0.6 hours $1.25 per hour $0.75 During December, the following activity was recorded by the company: The company produced 3,000 units during the month. A total of 8,000 pounds of material were purchased at a cost of $23,000. There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,000 pounds of material remained in the warehouse. During March, 1600 direct labor hours were worked at a rate of $6.50 per hour. Variable manufacturing overhead costs during March totaled $1,800. Page 1 of 2 Set A [Marks: 4+4+4=12] Required: i. Compute the materials price and quantity variances for the month. ii. Compute the labor rate and efficiency variances for the month. iii. Compute the variable overhead spending and efficiency variance