Question 1: A company produces and sells the following product. The standard cost for one unit is as follows: Quantity Cost Total Sales price 100 Direct material A 2kg $5 per kg $10 Direct material B 3litres $2 per litre $6 Direct wages 2 hours $10 per hour $20 Fixed production overhead $24 Total Standard Cost $60 Standard profit $40 The fixed overhead included in the standard cost is based on an expected monthly output of 1000 units. Fixed production overhead is absorbed on the basis of direct labour hours. The standard selling price per unit is $100 During the month of June the actual results were as follows: Sales Production $104,500 1,100 units Material A 2,100 kg used, costing $10,290 Material B 2,990 litres used, costing $6,279 Direct wages 2,190 hours worked for $21,462 Fixed production overhead $26,000 Required: a) Produce Standard/Original Budget, Flexible budget and Actual Budget. Calculate total variances b) Calculate the direct materials cost variance, the direct labour cost variance,the variable overheads variance and the fixed overheads variance, with each one, analysed into its component variances. c) Calculate sales variances and analyse its component variances