Original Budget	Actual	Flexible Budget
Units Produced (in units)	10,000	12,000
Materials used (kg)	400	700
Material cost ($)	8,000	See purchases
Direct Labour (hours)	35,000	46,102
Direct Labour ($)	385,000	507,080
Variable Overhead ($)	350,000	419,161
Fixed Overhead ($)	160,000	161,000

Other Information

Overhead is Allocated on Direct Labour Hours

During the year, 800 kg of materials were purchased for $5,000

Beginning Inventory: none

Ending Inventory: 100kg

Required:

Calculate the flexible budget amounts for all items.

Calculate the following variances

1.Material Rate

2.Material Efficiency

3.Labour Price

4.Labour Efficiency

5.Variable Overhaed Rate

6.Variable Overhead Efficiency

7. Fixed Overhead Rate

8.Fixed Overhead Production Volume

9.Assume that the Material, Labour and Variable Overhead variances are inter-related. What is the most likely single cause of these variances. Briefly explain your answer.