7.6 Mowbray Ltd makes and sells one product, the standard costs of which are as follows: 2 Direct materials (3 kg at 2.50/kg) (7.50) Direct labour (15 minutes at 9.00lhr) (2 .25} Fixed overheads (3.60} (13.35) Selling price M Standard profit margin M The monthly production and sales are planned to be 1,200 units. The actual results for May were as follows: .8 Sales revenue 18,000 Direct materials (7,400) (2,800 kg) Direct labour (2,300} (255 hr) Fixed overheads 14,100} Operating profit 4,200 There were no inventories at the start or end of May. As a result of poor sales demand during May, the business reduced the price of all sales by 10 per cent. Required: Calculate the budgeted profit for May and reconcile it to the actual prot through vari- ances. going into as much detail as is possible from the lnforrnatlon available