Auckland Toy is a company who manufactures toys. The company recently improved its production process by installing a robotic system. The installation of the new system was not anticipated when the current year's budget and cost structure were developed. The installation was accelerated by several major breakdowns in the company's old production machinery. The new system was very expensive, but management expects it to cut the labour time required by a substantial amount. Management also expects the new system to allow a reduction in direct material waste. On the negative side, the new system requires a more highly skilled labour force to operate it than was needed for the company's old equipment The following cost variance report was prepared for August; the first full month after the equipment was installed. Auckland Toy Company Cost variance report Direct material: Standard cost $301,225 Actual cost 299,350 Direct material price variance 75 U Direct material quantity variance 1,950 F Direct labour: Standard cost $196,5,00 Actual cost 191,900 Direct labour rate variance 2,400 U Direct labour efficiency variance 7,,000 F Manufacturing overhead Applied to work in process $200,000 Actual costs 204,000 Variable overhead spending variance 4,000 U Variable overhead efficiency variance 5,000 F Fixed overhead budget variance 15,000 F Fixed overhead volume variance 10,000 u The company budgets and applies manufacturing overhead on the basis of direct labour hours. Required: Question 4.3 List down the variances caused by the installation of the new system and comment on the possible reasons for the variances. (Word limit: 300 words. Show the word count at the end of your answer] (7 marks) Your Answer (expand the space as required): Word count=e