Question 3 (33 marks) A company is running a standard costing system. The table below presents information relating to one of its products, called Z, which is made in one of the company departments:- Standard product coste Product ze Unit ( Direct materials (6 kg at 4 per 242 kg) Direct labour one hour at 7 7e per hour Variable Production Qvecheade 3e Totale 34 Variable production overhead varies with units produced Budgeted Fixed production overhead, per month: 100,000 Budgeted production for product Z: 20,000 unit per month Actual production and costs for this month were as follows: Units of Z produced Direct materials purchased and used: 113,500 kg Direct Labour: 17,800 hourse Variable Production Overhead incurrede Fixed Production Overhead incurrede Totale 18,500 442,650e 129,940e 58,800 104.000 735,390e to e a) As the company's management accountant, you are required to prepare a columnar statement showing, by element of cost, the following: i) Original budget- ii) Flexed budget iii) Actual performance iv) Total variance. Full marks will be awarded for workings and the table. Show your workings for the two main variances (material variance and labour variance). (15 marks) b) Comment on two possible reasons for the variances in question (a). (4 marks) c) Your company is currently using traditional budgeting on an annual basis. You are asked to comment on its current budgeting process by critically evaluating its application (10 marks) d) What other options can the company have beyond the use of budgets? (4 marks)