A company operates using a standard marginal costing system and manufactures one product and management is trying to assess its operations. Standard revenue and cost data is provided for Cinco. Selling price $48.00 Direct material A 2.5 kg at $6.80 per kg Direct material B 1.5 kg at $4.80 per kg Direct labour 0.45 hrs. at $24.00 per hour Actual data for the twelve-month period was as follows: Sales and production 48,000 units of the blaster were produced and sold for $2,323,200 Direct material A 121,950 kg were used at a cost of $804,870 Direct material B 67,200 kg were used at a cost of $336,000 Direct labour Employees worked for 18,900 hours, but 19,200 hours were paid at a cost of $468,480 Budgeted sales for the period were 50,000 units of Product Blaster. A recession last year meant that the market for the product declined by 10%. Required: (a) Calculate the following variances. (i) Sales volume variance. (2 marks) (ii) Planning and operational variances for sales volume. (4 marks) (iii) Price, mix and yield variances for each material. (10 marks) (b) Suggest two possible explanations for the material price and yield variances calculated in part (a). (4 marks)