3. DUME Company produces chairs and has determined the following direct cost categories and budgeted amounts:

| Category | Standard Inputs for 1 output | Standard Cost per input |
| --- | --- | --- |
| Direct Materials | 1 | $7.5 |
| Direct Labor | 0.3 | $9 |
| Direct Marketing | 0.5 | $3 |

Actual performance for the company is shown below:

| Actual output: (in units) | 4,000 |
| --- | --- |
| Direct Materials: | |
| Materials costs | $30,225 |
| Input purchased and used | 3,900 |
| Actual price per input | $7.75 |
| Direct Manufacturing Labor: | |
| Labor costs | $11,470 |
| Labor-hours of input | 1,240 |
| Actual price per hour | $9.25 |
| Direct Marketing Labor: | |
| Labor costs | $5,880 |
| Labor-hours of input | 2,100 |
| Actual price per hour | $2.8 |

Required: (15%)

(1) What is the price variance of the direct materials and the efficiency variance for direct materials? Show your computations and indicate whether it is favorable or unfavorable.