Problem 2: The Hull factory of United Industrial Manufacturers makes just one product line. The current standard cost of one unit) of the product is as follows: Direct labour (15 minutes) 2.30 Direct materials (2 metres) 1.50 Fixed overheads (based on the budgeted monthly output of 20,000 units) 3.30 7.10 Selling price Profit 10.50 3.40 During last month, due to an unexpected fall in demand for the product, only 15,000 were made and sold. The actual results for last month were as follows: Sales revenue 153,900 Less: Direct labour (4,000 hours) 35,040 Direct materials (32,000 metres) 23,360 Fixed overheads 67,350 125,750 Operating profit 28,150 Required: Prepare a flexible budget for Hull, make a table showing the Budget, the Flexible Budget and the Actual result. Do the full variance analysis and create a statement of reconciliation