2. Variance Analysis Nail_It company is a manufacturer of a custom engraved hammers. For the year 2021, the weekly budget was as follows. Sales revenue $64,000: 2,000 hammers x price $32 Variable costs: o Direct materials $10,000: 2,000 hammers x 1 lbs per hammer x price $5/lb O Direct labour $50,000: 2,000 hammers x 5 hour per hammer x rate $5/hour o no variable overhead Fixed costs: $3,000 Profit: $1,000 The actual performance of the week was as follows. Sales revenue $70,400: 2,200 hammers x price $32 Variable costs: o Direct materials $13,200: 2,200 hammers x 1 lbs per hammer x price $6/lb o Direct labour $46,200: 2,200 hammers x 3 hour per hammer x rate $7/hour o no variable overhead Fixed costs: $8,000 Profit: $8,000 Required: 1) Compute the following variances a) Spending and Volume Variances of Materials b) Spending and Volume Variances of Labour c) Spending and Volume Variances of Fixed Overhead c) Materials Quantity Variance d) Materials Price Variance e) Labour Efficiency Variance f) Labour Rate Variance 2) Nail_lt company hired an experienced engineer and asked her to re-organize the production process. How could hiring an experienced engineer and their new production process explain the variances? Please comment on individual components of variances, their relations to other variances, and overall impact on profitability