3. Bovver Ltd. produces iron boxes and budgets 20 minutes per box for machine time. The firm budgets 50 per machine hour for variable production overhead. Bovver Ltd. produces 5,000 boxes during the period which took 2,000 hours to produce. Total variable production overhead costs of 82,000 were actually spent in the period. Bovver Ltd. had planned to make 6,000 boxes during the period and had budgeted to spend 40,000 on fixed production overhead. Actual fixed production overhead spent during the period was 45,000. REQUIRED: a) Calculate the following variances; (i) variable overhead spending variance (ii) variable overhead efficiency variance (iii) fixed overhead budget variance (iv) fixed overhead volume variance (12 marks) Critically evaluate the fixed overhead volume variance. You should explain what the term means and discuss how useful it is in providing information to management. (7 marks) There are many criticisms of budgeting as a performance management system. You are required to identify and explain four criticisms of budgeting as a performance management system and, for each one, you should provide your own example (either real or fictional). (14 marks) TOTAL 33 MARKS