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Question: During October, Natuzzi Ltd produced 3,900 turbines, and the accounting records indicated the following actual data: Direct material purchased 10,000 kilograms @$4.70 per kilogram Direct material used 9,550 kilograms Direct labour 15,100 hours @ $20 per hour The turbine has the following standard prime costs: Direct material: 2.5 kilograms @$4.50 per kilogram $ 11.25 Direct labour hours: 4 hours @$19 per hour $ 76.00 Standard prime cost per unit $ 87.25 REQUIRED: a) For the month of October, calculate the following variances, indicating whether each is favourable or unfavourable:
i) Direct material price variance (calculated at time of purchase).
ii) Direct material quantity/efficiency variance.
iii) Direct labour rate variance.
iv) Direct labour efficiency variance.
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