QUESTION 1 Hopeful Ltd uses a standard costing system. The company allocates overhead on the basis of machine hours. The actual production for the month of Mar was 70,000 units. The production manager informed you that the actual hours worked by the company for the month was 154,000 labour hours. The company's actual wage rate for the period was $18.00 per labour hour. The standard price of materials was $3.10 per kg. During the month, actual direct materials purchased and used by the company amounted to 180,000 kg. The actual purchase price of the materials was $3.20 per kg. The standard labour rate was $19.00 per labour hour. The production cost report shows the following: Standard quantity of direct materials was 2.5 kg per unit Standard direct labour hours was 2.1 hours per unit The standard machine hour for each unit of the product is 1 machine hour and the standard variable overhead rate is $2.00 per machine hour. Hopeful's actual variable overhead cost for the month amounted to $151,200. The actual total machine hours for the period was 56,000 machine hours. Required: (a) Calculate the following variances: (i) All necessary direct material variances (ii) All necessary direct labour variances (iii) All necessary variable overhead variances (b) Comment and discuss on all variances computed above. (15 marks) (9 marks)