(25 marks QUESTION 2 Mentimun Bhd is comparing budget and actual data for the last three months Budget RM 950,000 Actual RM Sales Cost of sales Raw Materials Direct labour Variable production overhead Fixed production overhead Net 133,000 152,000 100,700 125,400 438,900 130,500 130,500 300 115, 427,400 The budget was prepared on the basis of 95,000 units produced and sold, but actual production and sales for the three-month period were 90,000 units. Mentimun Berhad uses standard costing and absorbs fixed production overheads on machine hour basis. A total of 28,500 standard machine hours were budgeted. A total of 27,200 machine hour were actually used in the three-month period. Required Prepare a revised budget at the new level of activity using a flexible budgeting approach and briefly explain why such a revised should be prepared. a) (10 marks) b) Calculate the following: i. Raw material cost total variance ii. Direct labour cost total variance iii. Fixed overhead efficiency variance iv. Fixed overhead capacity variance v. Fixed overhead expenditure variance (9 marks) Suggest possible explanations for the following variances: i. Raw materials total cost variance ii. Fixed overhead efficiency variances ii. Fixed overhead expenditure variance. c) (6 marks)