The following standards have been established for a raw material used to make the product:

Standard quantity of the material per unit of output	4.5 pounds
Standard price of the material	$13.90 per pound
Actual material purchased	2000 pounds
Actual cost of material purchased	$26200
Actual material used in production	1300 pounds
Actual output produced	220 units
Standard direct labor-hours	3.3 hours per unit
Standard direct labor wage rate	$10.50 per hour
Actual direct labor-hours worked	1100 hours
Actual direct labor wages paid	$11385

1. What was the labor rate variance for the month?
2. What was the labor efficiency variance for the month?
3. Discuss the concept of "management by exception" # Material price variance = 1600 (Favorable) #Material quantity variance= 4309 (UnFavorable)