6. Annabel makes and sells a single product. The standard cost and revenue per unit are as follows: Selling price Direct material A 5kg @$25 per kg $400 125 Direct material B 3kg @$22 per kg 66 Direct labour 3 hours @$10 per hour 30 Variable Overhead 3 hours @ $7 per hour 21 158 Standard contribution The budgeted production and sales for the period in question were 10,000 units. The mix of materials can be varied and therefore the material usage variance can be sub-divided into mix and yield variances. For the period under review, the actual results were as follows: Production and sales Sales revenue 9,000 units $4,455,000 Material cost A-35,000 kg 910,000 B-50,000 kg 1,050,000 Labour cost 30,000 hours 385,000 Variable overhead 230,000 The general market price at the time of purchase for material A and B were $21 and $19 per kg respectively. There were no opening or closing inventory during the period. Required: a. Prepare a statement detailing the variance (including planning and operational, and mix and yield variances) which reconciles the budgeted and the actual contribution. b. Prove that the sum of mix and yield variances computed in (a) will be equal to the sum of DM Quantity variances for Direct Material A and Direct Material B. c. Explain the results and usefulness to Annabel of the planning and operational, and mix and yield variances that you have calculated in a. 4