SECTION B: PROBLEM SOLVING QUESTIONS QUESTION 1: Standard Costing Total mark for this question: 25 marks (Suggested time: 45 minutes) Ralp Ltd is engaged in aerial spraying of vegetables. Operating costs are difficult to control, so standard costs and standard cost variances are reported. The following standards were developed for the 'maxiprotect' spraying service. This is one of the company's major products. Standard quantity Direct material (insecticide) | 8 kilograms Direct labour 2 hours Total Standard price or rate $1.75 per kilogram $20 per hour Standard COST $14.00 40.00 $54.00 During May, Ralph purchased 160 000 kilograms of insecticide at a total cost of $304 000. The total wages for May were $5000, 40 percent of which was direct labour cost of the maxiprotect sprays. Ralph completed 40 maxiprotect sprays during May, using 400 kilograms of insecticide and 90 direct labour hours. REQUIRED 1. Calculate the following variances for May, and indicate whether each is favorable or unfavorable: () Direct material price variance (ii) Direct material quantity variance (iii) Direct labour price variance (iv) Direct labour quantity variance (4 marks) (4 marks) (4 marks) (4 marks)