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Marmot Products began production of a new product on April 1. The company uses a standard costing system and has established the following standards for one unit of the new product:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost
Direct materials	3.5	metres	$	6	per metre	$	21
Direct labour	0.4	hours	$	10	per hour	$	4

During April, the following activity was recorded regarding the new product:

1. Purchased 7,000 metres of materials at a cost of $5.75 per metre.
2. Used 6,000 metres of materials to produce 1,500 units of the new product.
3. Worked 725 direct labour-hours on the new product at a cost of $8,120.

Required:

1. For direct materials:

a. Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

b. Prepare journal entries to record the purchase of materials and the use of materials in production.

2. For direct labour:

a. Compute the direct labour rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

b. Prepare journal entries to record the incurrence of direct labour cost for the month.

3. Post the entries you have prepared to the T-accounts below:

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