JB Ltd. a construction business, currently owned by XYZ Plc., operates a standard marginal costaccounting system. Information relating to Product J, which is made in one of the companydepartments isgiven below:

ProductJ	Standard Marginal ProductCost Unit()
DirectMaterial 6kilograms at4perkg	24
DirectLabour 1hourat12 perhour	12
VariableProductionOverhead*	3
Total	39

*Variableproductionoverheadvarieswithunitsproduced.

Budgeted fixed production overhead, per month: 100,000.BudgetedproductionforProduct J:20000unitspermonth.

Actualproductionandcostsformonth6 areasfollows:

UnitsofJProduced	18500()
Directmaterialspurchasedandused:113500kg	442650
Directlabour:17800hours	223000
Variableproductionoverheadincurred	58800
Fixedproductionoverheadincurred	104000
	828450

Required:

1. Prepareacolumnarstatementshowing,byelementofcost,the:
   1. OriginalBudget;
   2. FlexedBudget;
   3. Actual;
   4. TotalVariances

1. Subdividethevariancesfordirectmaterialanddirect labourshowninyouranswersto (a)(i)

- (iv)abovetobemoreinformative formanagerialpurposes.

1. Critically identify the possible causes of the labour and material variances calculated in the above