Question 2 DEF Limited makes a winch for which the standard costs are: Sales Price Direct labour (2 hours) 31 11 Direct materials (1 kg) 10 Fixed Overhead Standard Profit The budgeted output for September was 1,000 winches the actual output was 1,100 units which sold for 34,950. No stocks were left at the end of the month. The actual production costs were: Direct Labour (2,150 hours) Direct Materials (1,170 kg) Fixed Overheads Required: 12,210 11,630 3,200 a) Calculate the following variances for September and reconcile the budgeted and actual profit figures. sales volume variance sales price variance material price variance material usage variance labour rate variance labour efficiency variance and fixed overhead variance [20 marks] b) Discuss the uses of budgets and indicate what needs to be in place for them to work effectively. [5 marks] [Total 25 marks]