Explanations of what may have caused the variances to occur Recommend which variances should be investigated; Recommend at least two actions the company can take to rectify the variances Exhibit 1 Actual Results Static Budget Leather Vegan- Total Leather Vegan- Total Polymer Polymer 12.500 16,500 29,000 15.000 5,000 20.000 $1.875,000 $1,980,000 $3,855,000 $2.250.000 $600,000 25000 Sales volume Sales revenue Direct materials $250, 300 5690 500 $850,000 $300.000 Direct labour 480.000 432008 912.608 600.000 Variable overhead 75.000 99.000 174.000 Total Wariable cost SABROSO 100 $129251403 $99.00 Contribution margin $1,061,700 $849,893 $1,911,593 $1.260.000 Fixed Overhead 59720.000 Net income $991,593 $135,000 $450.000 135,000 735.000 300000 120.000 $800.000 $300,000 $1.560.000 $640,000 Standards from last year Standard price rate (per metre tour) Leather Vegan- polymer Direct materiais 540 per m 36 perm Direct labour $20 / $18/hr Variable overhead allocated at a rate of $8 per unit Standard Quantityhour per unit Leather Vegan polymer 0.5 m 0.75 m 2 hrs 1.5hrs Actual results Actus price rate (per metre/hour) Leather Vegan- polymer 541 perm 542 per $207hr $15.30/hr Actus quantities Leather Vegan- polymer 6,300 m 14 250 m 24,000 hrs 28,275 hrs Direct materials Direct labour Exhibit 1 Actual Results Static Budget Leather Vegan- Total Leather Vegan- Total Polymer Polymer 12 500 16,500 29,000 15.000 5000 20.000 $1.875,000 $1,980,000 $3,855,000 $2.250.000 $600,000 $2,850,000 Sales volume Sales revenue Direct materials Direct labour Variable overhead Total variable cost Contribution margin Fied overhead Net income $258,300 $598,500 $856.800 $300.000 480.000 432,608 912,600 600,000 75.000 99.000 174.000 90.000 $313.300 $112.0.100 51.943.408 $990.000 $1.061,700 $849,893 $1,911,593 $1,260,000 $920.000 $991,593 $135.000 $450,000 135.000 735,000 30.000 120.000 $300.000 $1.290.000 $300,000 $1,560,000 $920.000 $640,000 Standards from last year Standard price rate (per metre/hour) Leather Vegan- polymer Direct materials $40 per m 536 perm Direct labour $20/hr $18/hr Variable overhead allocated at a rate of $6 per unit Standard quantityhour per unit Leather Vegan- polymer 0.5 m 0.75 m 2 hrs 1.5 hrs Actual results Actual price rate (per metrehour) Leather Vegan polymer $41 per $42 perm $20/ 515,307hr Actual quantities Leather Vegan polymer 6.300 m 14.250 m 24,000 hrs 28.275 hrs Direct materials Direct labour