KHUSHBOO LTD is a well-established manufacturer of a specialized product, Flower, which has the following specifications for production: Components WALS LOPS Standard quantity 15 Standard price (E) The standard direct labour hours to produce a Flower at the standard wage rate of 10.50 per hour has been established at 60 hours per Flower. The annual fixed overhead budget is divided into calendar months with equal production per month. The budgeted annual fixed overheads are 504,000 for the budgeted output of 2,400 Flowers per annum. Mr Rose, a marketing person, is now the managing director of Khushboo Ltd and must report to the board of directors later this day and he seeks your advice in respect of the following operating information for the month of May: (1) Sales Cost of sales: () 504,000 Direct materials 281.520 Direct labour 112.329 393.840 Fixed production overheads 42.600 436,440 Gross profit 67.560 Administration expenses 11.150 Selling and distribution expenses 17.290 Net profit 39.120 The sales manager informs that despite adverse trading conditions his sales staff have been able to sell 180 Flowers at the expected standard selling price. The production manager along with the purchasing department manager are also pleased that prices for components have been stable for the whole of the current year and they are able to provide the following information: Stocks for May are as follows: Component WALS Component LOPS 1 May 31 May 600 750 920 450 The actual number of direct labour hours worked in May was 11.700, considerably less than the production manager had budgeted. Further, the purchasing manager advised that WALS had cost 171.000 at a price of 57 per unit in the month of May and 1,000 LOPS had been acquired for 81.000. Perform all variances analysis with appropriate calculations.