Flex, Inc. manufactures and sells flash drives. Flex has the following budgeted standards for the month of October, 2019: Forecasted sales for the month 1,500,000 units Budgeted average selling price per drive $4.00 Total direct materials standard cost per drive $0.80 Direct manufacturing labour Direct manufacturing standard labour cost per hour $15.00 Labour productivity standard (drives per hour) 300 Direct marketing cost per unit $0.30 Fixed overhead $900,000 In October, Flex's production manager finds the following actual operating outcome: Unit sales totaled 90% of plan. 0 Actual selling price declined to $3.80 per drive. In order to keep the productivity level of 300 drives/hour, the manager increased actual hourly pay from $15 to $16 in September. However, due to favourable market conditions the actual price of direct materials per unit dropped to $0.70. Actual direct marketing costs were $0.30 per unit. Fixed overhead costs were $30,000 below plan. Required: 1) Calculate the flexible-budget operating income and the total flexible-budget variance. (7 marks) 2) Calculate the rate and efficiency variances for direct manufacturing labour (3 marks) 3) A second-year accounting student makes the following statement: "Labour rate and efficiency variances in standard costing should be viewed as independent." Do you agree with the statement? Use the analysis in 2) to support your opinion. (2 marks)