The Kohler Chemical Manufacturing Company produces two primary chemical products to be used as base ingredients for a variety of products. The 2016 budget for the two products (in thousands) was as follows:

The following planning assumptions were used for the budget: (1) a direct materials yield of 96%, and (2) a direct labour rate of $6 per hour. The actual results for 2016 were as follows (in thousands):

The actual production yield was 95% for LX-4 and 94% for ABC-8. The direct labour cost per hour for both products was $6.50.
Instructions
(a) Calculate for product LX-4: (1) the direct materials price variance, and (2) the direct materials efficiency (yield) variance.
(b) Calculate for product ABC-8: (1) the direct labour rate variance, and (2) the direct labour efficiency variance.

Level of production in litres Direct materials Direct labour Total direct manufacturing cost LX-4 ABC-8 Total 1,8001,800 3,600 $4,500 $5,625 $10,125 2,700 $7,200 $8,325 $15,525 2,700 5,400 ABC-8 $4,104.00 $6,415.50 $10,519.50 $9,691.50 LX-4 Total Total litres produced Direct materials Direct labour Total direct manufacturing 1,974 3,684 5 08.00 3,276.00 6,084.00 $16,603.50 $6,912.00 cost