(34 marks) Question 1 Goodfans Ltd produces a single product that uses standard costing system to control its costs. The standard and actual costs data for the month of June to produce one unit of product is given below: Actual cost (BWP) Standard cost (BWP) 28.80 29.48 14.40 Direct materials: Standard: 4.0kg at P7.20 per kg Actual: 4.4 kg at P6.70 per kg Direct labour: Standard: 1.6 hours at P9.00 per hour Actual: 1.4 hours at P9.70 per hour Variable Manufacturing overhead: Standard: 1.6 hours at P3.60 per hour Actual: 1.4 hours at P4.30 per hour Total cost per Unit 13.58 5.76 48.96 6.02 49.08 During the month of June, 4 800 units of product were produced. The comparison of standard and actual cost on the basis of total cost is given below: Actual Cost (4 800 units x P49.08) Standard cost (4 800 units x P48.96) Difference in cost (Unfavorable) P235 584 P235 008 P 576 the company purchased 21.120 kilograms of materials from its supplier. There was no inventory of materials in stock at the start and at the end of month You are required to: 1. Compute Direct Materials price and quantity variances. (6 marks) 2. Compute direct labor rate and efficiency variances. (6 marks) 3. Compute variable manufacturing overhead spending and efficiency variances. (6 marks) 4. The total cost variance of P576 is only 0.25% of P235 008 standard cost which means the company's costs are well under control. Do you agree? Explain. (4 marks) 5. What are possible causes of variances that you have computed. (12 marks)