4 (8 marks) Cootamundra Industries (CI), developed standard costs for direct material and direct labour. In 2018, CI estimated the following standard costs for one of their major products, the 30-litre heavy-duty plastic container. Budgeted quantity Direct materials 0.20 kg Direct labour 0.10 hours Budgeted price $26 per kg $14 per hour During July, CI produced and sold 10 000 containers using 2200 kg of direct materials at an average cost per kg of $24 and 1050 direct manufacturing labour hours at an average wage of $14.75 per hour Required: a) July's direct material price variance (2 marks) b) July's direct material efficiency variance (2 marks) c) July's direct manufacturing labour price variance (2 marks) d) July's direct manufacturing labour efficiency variance (2 mark) Note: Denote the variances as favourable (F) or unfavourable (U), as the case may be. Q. 5 (14 marks) Wollongong Equipment uses a flexible budget for its indirect manufacturing costs. For 2018, the company anticipated that it would produce 18 000 units with 3500 machine-hours and 7200 employee days. The expected costs and cost drivers are: Product handling Inspection Utilities Maintenance Supplies Fixed Variable $30 000 $0.40 8000 8.00 400 4.00 1000 0.20 Cost driver per unit per 100 unit batch per 100 unit batch per machine-hour 5.00 per employee day During the year, the company processed 20 000 units, worked 7500 employee days, and had 4000 machine-hours. The actual costs for 2018 were: Actual cost Product handling Inspection Utilities $36 000 9000 1600 Maintenance 1200 Supplies 37 500 a. Prepare the static budget using the overhead items above and then calculate the static-budget variances. (6 marks) b. Prepare the flexible budget using the overhead items above and then calculate the flexible- budget variances.(8 marks)