The following information describes production activities of Mercer Manufacturing for the year:

Actual raw materials used 16,000 lbs. at $4.05 per lb.
Actual factory payroll 5,545 hours for a total of $105,355
Actual units produced 30,000

Budgeted standards for each unit produced are 0.50 pounds of raw material at $4.00 per pound and 10 minutes of direct labor at $20 per hour.

(1) Compute the direct materials price and quantity variances.

(2) Compute the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.