Given the following information:

Budget Actual

Units produced 20,000 22,000

Materials (kg) 80,000 96,000

Direct Labour (Hours) 290,000 343,000

Material Costs $800,000 ?

Direct Labour Costs $3,850,000 $4,557,800

Variable Overhead Costs $3,500,000 $4,400,000

Fixed Overhead Costs $1,600,000 $1,610,000

Other Information

Overhead is Allocated on Direct Labour Hours

During the year 99,000 kg of materials were purchased for $800,000

Beginning Inventory: none

Ending Inventory: 3,000 kg

Required:

Prepare a flexible budget

Calculate the following variances

1. Material Rate
2. Material Efficiency
3. Labour Price
4. Labour Efficiency
5. Variable Overhead Rate
6. Variable Overhead Efficiency
7. Fixed Overhead Rate
8. Fixed Overhead Production Volume