Blue-Sky Ltd has appointed you as an advisor to assist the managers in analyzing the variances. Below is a part of the information provided by the firm. The budget is planned payment for 1'050 hours of direct labour for $40 per hour, while actual performance shows a payment of $45'000 for direct labour.

a) what is the variance in dollars

b) identify whether the variance is favourable or unfavourable?

c) explain potential causes that may result in the variance (2 potential causes suffice)