Question 2 Holistic Limited produces one standard product and operates a system of variance accounting using a fixed budget. Data from the standard product cost, budget and actual data for the month ended March 31, 2021 are given below Actual data for the month ended March 31, 2021: Production: 11.200 units produced and sold at a price of 10% lower than the budgeted one. Direct materials consumed: Material A: 106,000 kg at $23 per kg Material B: 230,000 kg at $26 per kg. Direct wages incurred 15,440 hours at $60 per hour. Fixed production overhead incurred $988,000. Variable overhead cost incurred $787,600. Budgeted and standard cost data Budgeted sales and production for the month: 10,000 units. Standard cost for each unit of product: Direct Material A: 10 kg at $20 per kg. Direct Material B: 20 kg at $28 per kg. Direct Wages: 1.5 hours at $50 per hour Fixed production overhead and variable overheads is absorbed at 125% and 95% of direct wages respectively. Budgeted sales price has been calculated on a markup of 50% on its standard product cost (7 marks) (7 marks) Required: (a) Determine the standard product cost and selling price (6) Determine the actual profit Determine the following variances: (1) Material price and material usage Wage rate and labour efficiency (iii) Fixed overhead expenditure (iv) Volume efficiency and volume capacity Variable overhead efficiency and expenditure (v1) Sales margin price (vii) Sales margin volume (d) Briefly explain the dificulties in interpreting of sales variances. (28 marks) (8 marks)