Kestrel manufacturing company has recently implemented a new standard costing system Standard data for the month of July 2015 was Sales and production 5000 units Selling price per unit $100 Materials per unit 6 kilos Materials cost per kilo $5 Labour per unit Labour cost per hour $80 3 hours The actual results for July 2015 were: Production Sales Sales revenue Materials used Materials cost Labour hours Labour cost 5375 units 5200 units $525 000 40 000 kilos $218 000 14 200 hours $118 000 Required: (a) Calculate the following variances, stating clearly whether the variance is adverse or favourable (0) Sales price () Sales volume Material price (iv) Material usage (v) Labour rate (vi) Labour efficiency [18] Suggest a possible reason for each of material and labour variances [4) For each event listed below identify which variance would be affected and state whether the effect would be favourable or adverse 0 Use of higher grade raw materials (0) Giving sales discounts for bulk buying (ili) Decrease in overtime hours [3] (b) (c) Page 4 of 5