Question 2 The following information is provided to assist you in evaluating the performance of the production operations of the Katz Company: Units produced (actual) 42,000 Master production budget Direct materials. $132.000 Direct labor. 112.000 Overhead.. 159,200 Standard costs per unit Direct materials.. $1.65 x 2 gallons per unit of output Direct labor... $14 per hour x 0.2 hour per unit Variable overhead. ...... $11.90 per direct labor-hour Actual costs Direct materials purchased and used.... $150,960 (81,600 gallons) Direct labor. 111,708 (8,560 hours) Overhead. 163,200 (61% is variable) Variable overhead is applied on the basis of direct labor-hours Required (1) Analyze all variances. (2) How would you control variable and fixed costs