17 Question 1 Home Security Designs Lid manufactures fences for homes. A certain fence requires the following Direct materials standard 10 metres at $5 per metre Direct labour standard 5 hours at $10 per hour Budgeted fixed overheads $120,000 per year During 2019, the company made 1,500 tences and used 14,000 metres of materials costing $68,600 Direct labour totaled 7.600 hours for $79,800 Fixed overheads were $118,000. Required (show your workings for calculations & write in your own words) (a) Compute the direct materials price variance, efficiency variance and flexible budget variance for the year (1.5 points) (b) Compute the direct labour price variance, eficiency variance and flexible budget variance for the year (15 points) (c) Describe one possible cause for the variances you calculated above (4 points) (1) Direct materials price variance (ii) Direct materials officiency vanance (1) Direct labour price variance (iv) Direct labour efficiency variance (d) Managers should be rewarded for favourable variances and punished for unfavourable variances Do you agree? Explain (3 points)