Flexible Budgets and Variance Analysis Question 2 Shandy manufacturing produces cartons of beer sold internationally. The company reveals the following budgetary information relating to its standard direct material and direct labour costs for a carton of beer in 2010: Direct materials: $1.50 per kg. 5 kg per carton = $7.50 per carton Direct labour: $25 per hour 12 minutes per carton = $5 per carton You are informed that 4,000 cartons were sold in 2010. 300 cartons were ready for sale at the beginning of 2010 and 800 finished cartons were in stock at the end of 2010. In 2010, direct labour staff had actually worked 1000 hours and were paid $26,500. Further, 25,000 kilograms of direct materials were purchased in July, for $40,000. The direct materials balance in the raw materials warehouse was 2000 kilograms at the start of 2010, and 6,000 kilograms at the end of 2010. Required: Please identify the direct materials and direct labour variances for 2010