Mukukulu Mulenga plc is a manufacturer of beds. It uses a standard absorption costing system to monitor performance of managers and departments. A standard absorption cost card for one of its models, the Dreamer, is given below. Budgeted production and sales are 1,000 Dreamers per month. Actual results for the manufacture and sale of Dreamers for the most recent month were as follows: Sales: 1,200 beds at K240 each. Production: 1,300 beds Direct material (purchased and used): 16,000 metres at K1.40 per metre Direct labour paid for 5,800 hours at K6.00 per hour and 5,000 hours were worked. Variable overhead K75,500 Fixed overheads K54,600. There were no opening stocks of finished goods. Required: (a) Calculate the following variances for the most recent month (i) Direct material price; (ii) Direct material usage; (iii) Direct labour rate; (iv) Direct labour efficiency; (v) Variable overhead expenditure; (vi) Variable overhead efficiency; (vii) Fixed overhead expenditure; (viii)Fixed overhead capacity; (ix) Fixed overhead efficiency; (x) Sales volume (1.5 marks) (1.5 marks) (1.5 marks) (1.5 marks) (1.5 marks) (1.5 marks) (1.5 marks) (1.5 marks) (1.5 marks) (1.5 marks) (IX) FIXed overhead efficiency; (x) Sales volume (xi) Sales price. (1.5 marks) (1.5 marks) (1.5 marks) (xii) Direct labour idle time. (1.5 marks) (b) Explain the differences between standard absorption costing and standard marginal costing in the following areas: (no further calculations are required) (i) the sales volume variance; (2 Marks) (ii) the fixed overhead variances; (2 Marks) (iii) stock valuation and its effect upon profit