4. The following information is from Megaplex'static budget for 2018: Expected production and sales : 14,000 units Expected selling price per unit :$ 1,600 Expected variable manufacturing overhead costs $3,500,000 (550/direct manufacturing labour hour, 70,000 hours) Expexted total fixed manufacturing costs : $4,000,000 Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labor: Standard Quantity Standard Price Standard Unit Cost $35 per ks Direct manufacturing labor $40 per hour Direct materials 30 kgs 5 hours 750 $200 During 2018, actual number of units produced and sold was 13,000, at an average selling price of $1,550. Actual cost of direct materials used was $11,687,000, based on 377,000 kgs purchased at $31 per kg. Direct manufacturing labor-hours actually used were 58,500, at the rate of $38 per hour. As a result, actual direct manufacturing labor costs were $2,223,000. Actual variable overhead costs were $3.042,000 and actual fixed costs were $4,100,000. There were no beginning or ending inventories. i. Calculate the sales-volume variance and flexible-budget variance for operating income. (15 points) Flexible Badget Flexible-Budget Actual Resul Variances Units Sold Revenues Variable Costs: Direct Materials Costs Direct Labor Costs Variable Manufacturing OH Total Variable Costs Contribution Margin Fixed Manufacturing OH Operating Income ii. Compute price and efficiency variances for direct materials and direct manufacturing labour. (10 points) Direct Materials Price Variance Direct Materials Efficiency Variance Direct Labour Price Variance Direct Labour Efficiency Variance iii. Compute spending and efficiency variances for variable manufacturing overhead. (5 points) Actual Variable Overhead Allocation Rate = Direct Materials Spending Variance Direct Materials Efficiency Variance iv. Compute spending and production volume variances for fixed manufacturing overhead. (10 points) Spending Variance for Fixed Manufacturing Overhead = Fixed Manufacturing Overhead Allocation Rate = Allocated Fixed Manufacturing Overhad = Production Volume Variance = Page 2 of 2