Nevue Co. (Nevue) manufactures special electrical equipment and parts. Nevueemploys a standard cost accounting system with separate standards established foreach product.One of the products produced by Nevue is a digital tablet. Production volume ismeasured by direct labourhours in the production of the tablets, and a flexible budgetsystem is used to plan and control department overhead.The standard cost of one tablet for the year was calculated at $73.75 as follows:Direct materials:A (5 units$1.75)$8.75B (3 units$2.50)7.50Direct labour(2 hours$21)42.00Variable overhead (2 hours$1.50)3.00Fixed overhead (2 hours$6.25)12.50$73.75Overhead rates are based upon normal capacity for the year,which is estimated at50,000 direct labourhours.During the year, 27,000 tablets were produced. Thebudgeted selling price was $180per unit,and the actual selling price was $175per unit.The following costs were incurred during the year:Purchase and use of:Direct material A (137,500 units$1.79)$246,125Direct material B (82,000 units$2.45)200,900Direct labour (52,800 hours$21.30)1,124,640Variable overhead87,000Fixed overhead306,000Page8Intermediate Management AccountingCopyright 2021Chartered Professional Accountants of Canada. All rights reserved.(CONTINUED ON PAGE9)Required:a)Prepare an income statement schedule showing the following columns:static budget, flexible budget, actual, and variance. Use the contribution format.(6marks)b)Using the information in the income statement scheduleprepared in part (a),calculate the sales price variance, sales volume variance, and fixed overheadbudget variance.(2marks)c)Calculate the following cost variances:i.direct materials price variance for direct material A(1mark)ii.direct labour efficiency variance(1mark)iii.variable overhead spending variance(1mark)iv.fixed overhead volume variance(1mark)Page9Intermediate Management AccountingCopyright 2021Chartered Professional Accountants of Canada. All rights reserved.(CONTINUED ON PAGE10)Question6(11marks)Pirates Corp. (Pirates) produceshigh-quality replicagold coins for toy pirate ships.Producing the coins takes two processes:cutting, for smoothing and cutting the gold,and thenstamping, for printing pictures on the coins. Pirates uses a firstin, firstoutprocess costing system to record inventory andcost of goods sold.The following is the production information for the Stamping department for the month ofOctober. Good units transferred from the Cutting department into the Stampingdepartment are added at the start of this process, with conversioncosts incurred evenlythroughout. A polish is added at the 80% complete point.Beginning work-in-process (WIP)30% complete5,000 unitsCosts in beginning WIP:Transferred-in costs$125,000Conversion costs$95,000Costs added during the month ofOctober:Direct materialspolish$256,000Transferred-in costs (12,000 units)$315,000Conversion costs$198,000Ending WIP90% complete3,500 unitsRequired:a)Complete the process costing report for the month ofOctober.(5marks)b)Using the report in part(a), calculate the following information:i.cost per equivalent unit(1.5marks)ii.total costs transferred out(3marks)iii.ending work-in-process