21 Question 5 Cagney Company applies overhead to the single product it manufactures on the basis of standard direct labourhours (DLH). Each unit of product is expected to require 4 direct labour-hours and 10 kg of direct materials. The variable overhead application rate is $5DLH. The standard hourly wage rate is $25, the standard overhead cost per unit is $30, and the standard price per kilogram of direct materials is S6. Total monthly overhead cost in the Mexible budget is predicted by the following cost equation: $15000 + $20 Quantity of production During September, the company produced 1200 units using 5,200 DLH and 12.500 kg of direct materials. It incurred overhead costs of $41000, of which $26000 was variable overhead. There was 2,000 kg of direct materials in inventory at the beginning of September and the company purchased 10,500 kg of direct materials for $65,000Cagneys average wage rate in September was $26.65 per hour. Required 12 a. Calculate the following variances: i) Materials price variance ii) Materials quantity variance ii) Labour rate variance iv) Variable overhead spending variance v) Variable overhead efficiency variance 9 b. Calculate the fixed overhead volume variance