12 3 points A company operates a tolerance policy for variances: as 5% adverse/favourable. The latest budget report is below: Sales Materials Labour Fixed costs Actual 432,520 96,850 122,650 243,850 Budget 460,540 92,210 116,880 240,500 all variances need investigating the labour variance needs a 'watching brief' applied the sales and materials variances need further investigation the percentage variance for fixed costs is 1.4% adverse the materials variance needs a watching brief applied