4 Martin Company manufactures and sells a chemical compound for industrial use. The following information was available at the beginning of 2017: Standard selling price 1,170.00 Estimated production & sales (units) 2,025 Estimated direct materials (27 Kilograms at 10.00 per kg.) 270.00 Estimated direct labour (20 hours at 7.00 per hour) 140.00 Estimated variable manufacturing overhead (15 hours at 5.00 per hour) 75.00 Production & sales At the end of 2017, Martin Company established the following actual figures: 1,725 units sold for 1,210.00 per unit 63,000 Kg. at 9.00 per Kg. 45,000 hours at a total cost of 432,000 31,050 hours at a total cost of 230,000 Direct materials Direct wages Variable manufacturing overhead Required: (a) Calculate the following variances and indicate whether the variances are adverse or favourable: (i) Materials price (ii) Materials usage (iii) Labour rate (iv) Labour efficiency (v) Variable overhead rate (vi) Variable overhead efficiency (15 Marks) (b) Discuss four possible causes for each of the following variances: (i) (ii) Materials usage Labour efficiency (7 Marks) (c) Explain how you would determine which variance to examine further in relation to a work performance? (3 marks) QUESTIONE [Total 25 marks]