Leo soft toys manufactures toy lions. The following is their static budget for the year ended 30*h June 2019: Static Budget 25,000 212,500 Unit sales Revenues Variable costs: 25,000 lkg a $1 62,500 $25 per hour - each unit 6 minutes S 12,500 $5 per hour 100,000 Direct materials Direct labour Variable overheads Total variable costs Contribution margin 112,500 Fixed manufacturing costs 45,000 67,500 Operating profit Leo Soft Toy's actual results to 30 June 2019 were: Actual results Unit sales 30,000 243,000 Revenues Variable costs: Direct materials 26,400 (33,000 kg used) 72,000 (rate $30 per hour) 9.600 (actual $4 per hor) 108,000 Direct labour Variable overheads Total variable costs 135,000 Contribution margin Fixed manufacturing costs $ 45,500 89,500 Operating profit Required i. Based on the static budget alone, what is the contribution per unit? How many units would Leo soft toys need to sell to break even in the year to 30 June 2019? (3 marks) ii. Compare the Static Budget and Actual results for the year to 30h Jne 2019 for Leo soft toys and calculate all appropriate variances for the year (show all workings) iii. Prepare a reconciliation of the Static-budget operating profit and the Actual profit for Leo soft toys for the year ended 30 June 2019. See Table 11-4 p. 433 of the text 2d edition (reproduced below) as the exemplar format to use. You will need to make changes to the format to suit the business e.g. only one category of direct material compared to Webb Ltd, two categories for variable overhead variances (spending and efficiency) and one for fixed overhead spending variance (no production volume variance as not using a fixed overhead rate) and you need to decide whether your calculated variances are favourable or unfavourable. (24 marks) (8 marks) TABLE 11-4 Reconcliation of static-budget operating profit and actual operating profit for Webb Ltd April 2014 108 000 Static-budget operating profit Unfavourable sales-volume variance for operating proft Flexible-budget operating profit 64000 44000 Flexible-budget variances for operatin Favourable selling-price variance ofit g pr 50000 Direct materials variances Price variance (cloth) (10025) Efficiency variance (cloth) (1450) Price variance (zippers) (10547) Efficiency variance (zippers) 100 (21922) Unfavourable direct materials variance Direct labour variances 9250) Price variance (cutting) Efficiency variance (cutting) Price variance (sewing) Efficiency variance (sewing) 1500 (21600) (4000 (33350) (10500) Unfavourable direct labour variance Unfavourable variable overhead variance (9000) Unfavourable fixed overhead variance 24772 Unfavourable flexible-budget variance for operating profit $19228 Actual operating proft