ACTIVITY A company has budgeted for the following costs in manufacturing 1,000 units during the first quarter of 20X7: /pair Direct material ( 3 metres @ 5/metre) 15 Direct labour ( 4 hours @ 4/hour 16 Variable overheads costs (5/direct labour hour) 20 Fixed overheads costs (5.5/direct labour hour) 22 Total budgeted cost per unit 73 During the quarter 1,100 units were produced incurring the following costs: Direct materials were 4 metres @ 4 per metre Direct labour was 3 hours @ 5 per hour Variable overheads were 20,000 Fixed overheads were 25,000 1) Prepare Standard/Original Budget, Flexible budget and Actual Budget. Calculate total variances 2) Calculate the direct materials cost variance, the direct labour cost variance, the variable overheads variance and the fixed overheads variance, with each one, analysed into its component variances.