HN Co uses standard costing for its product the Bl. The cost card for the product Bl is shown below. $ Sales price 300 Direct material 5 kg @ $10 per kg -50 Direct labour 4 hrs @ $12 per hour -48 Variable overhead 4 hrs @ $5 per hour -20 Fixed overheads 4 hrs @ $8 per hour -32 Profit 150 The standard cost operating statement (which is incomplete) for the Bl was as follows: 2 175 000 Budgeted profit Sales volume variance Flexed budgeted profit Sales price variance Cost variances -133 200 Favourable $ 80 080 Adverse $ 30 800 32 340 36 960 16 016 Material price Material usage Labour rate Labour efficiency Variable overhead expenditure Variable overhead efficiency Fixed overhead expenditure Fixed overhead capacity Fixed overhead efficiency Total cost variances 15 400 25 872 53 440 24 640 Actual profit 14 800 units were sold There was no opening and closing inventory of raw materials. during the period and 15 400 units were produced. Required: (a) State whether HN Co is using absorption or marginal costing. (b) What are the following figures? (i) The number of units budgeted to be sold (ii) The flexed budget profit (iii) The average selling price per unit (iv) The average materials cost per kg (v) The number of labour hours worked (vi) The fixed overhead volume variance, stating whether it is favourable or adverse (vii) The amount of overhead over/under-absorbed (c) Which TWO of the following might explain the adverse materials usage variance? (0) Cheaper labour being used, but working less efficiently (ii) Stricter quality control procedures (iii) Discounts received (iv) Reduction in waste HN Co uses standard costing for its product the Bl. The cost card for the product Bl is shown below. $ Sales price 300 Direct material 5 kg @ $10 per kg -50 Direct labour 4 hrs @ $12 per hour -48 Variable overhead 4 hrs @ $5 per hour -20 Fixed overheads 4 hrs @ $8 per hour -32 Profit 150 The standard cost operating statement (which is incomplete) for the Bl was as follows: 2 175 000 Budgeted profit Sales volume variance Flexed budgeted profit Sales price variance Cost variances -133 200 Favourable $ 80 080 Adverse $ 30 800 32 340 36 960 16 016 Material price Material usage Labour rate Labour efficiency Variable overhead expenditure Variable overhead efficiency Fixed overhead expenditure Fixed overhead capacity Fixed overhead efficiency Total cost variances 15 400 25 872 53 440 24 640 Actual profit 14 800 units were sold There was no opening and closing inventory of raw materials. during the period and 15 400 units were produced. Required: (a) State whether HN Co is using absorption or marginal costing. (b) What are the following figures? (i) The number of units budgeted to be sold (ii) The flexed budget profit (iii) The average selling price per unit (iv) The average materials cost per kg (v) The number of labour hours worked (vi) The fixed overhead volume variance, stating whether it is favourable or adverse (vii) The amount of overhead over/under-absorbed (c) Which TWO of the following might explain the adverse materials usage variance? (0) Cheaper labour being used, but working less efficiently (ii) Stricter quality control procedures (iii) Discounts received (iv) Reduction in waste