Question 1 20 MARKS Excellent Milk Limited is a leading dairy company with a multinational management framework that focuses on a strong local presence to remain close to consumers in USA. The company is engaged in manufacturing and distributing of a range of dairy products and fruit juice drinks, such as specialised powders for infant and growing children, liquid milk in different packaging formats and yoghurts. During the year, the company produced and sold 44,000 boxes and recorded the following cost data: Direct materials: Standard (3 litre x $1.10 per litre) Direct labour: Standard (0.1 hr x $9.00 per hr) Manufacturing overhead: Standard: Variable (0.20 machine hr x $9.00 per hr) Fixed ($96,000 for budget volume of 40,000 boxes and 8,000 machine hours) Total manufacturing costs Actual data Actual direct material cost (136,600 litre x $1.05 per litre) Actual direct labour cost (4,600 hrs x $8.80 per hr) Actual fixed manufacturing overhead a. You are required to calculate, 1. material price variance 2. material usage variance 3. total material cost variance 4. labour rate variance 5. labour efficiency variance 6. total labour cost variance Standard Unit Cost $3.30 $0.90 $143,430 $40,480 $168,800 $1.80 $2.40 $8.40 (12 MARKS) b. Suggest ONE(1) possible causes for material price variance, material usage variance, labour rate variance and labour efficiency variance which you have calculated. (8 MARKS)