A) Pan and Cook Ltd operates a large bakery at the AnC shopping center. The company employs a standard costing system. The expected production for January 2021 for its flagship large size sponge cake was 150, but in February the figures show a production and sales of 120 large size sponge cakes for January. The actual costs for January were 380 labour hours (at a cost of GHS 8,360); Fixed overhead of GHS 5,000; 1,150 kg of materials (at a cost of GHS 2,875). Only 90% of direct materials were used in production, while 5% of direct labour constituted idle time. As a manager you know the following standards:

Materials: 10 kg at GHS 3/kg

Labour: 4 hours at GHS 20/hour

Fixed overhead: GHS 40/ unit

Required:

i). Calculate both the price and quantity variances for materials, labour and overhead.

ii). Indicate who you would interview to learn more about the labour variance and state any three (3) reasons why such person should be interviewed

iii. State four factors that a company would need to consider before deciding whether to investigate a variance.

iv. State and explain four differences between standard costing and budgetary control.