Question 3 [45 marks] (A) (25 marks) Success Son. Bhd. produces a product, P with the following standard costs and quantities: Raw materials usage per unit 2 kilograms Raw materials cost per kilogram RM5 Labour hours per unit 3 hours Labour cost per hour RM8 The company's budgeted information for 2020 is as follows: . Budgeted sales and production of 4,000 units based on 12,000 budgeted direct labour hours . Total budgeted variable overhead RM48,000. . Variable overheads are absorbed based on direct labour hours. . The standard selling price of product P is RM34 per unit and the standard variable cost is RM20 per unit. Actual results for 2020 were as follows:| . Actual sales and production 4,200 units at sales value of RM148,000. . Total variable overhead RM43,600. Raw materials purchased and used during the year cost RM28,800 for 7,200 kilograms. . Direct labour costs were RM94,500 for 10,500 direct labour hours actually worked. You are required to : (a) Calculate the standard cost per unit of product P. (3 marks) standard cost per unit = Direct Material + Direct Labour + Variable OH + Fixed OH (b) Calculate (i) Direct material price variance. (2 marks) (ii) Direct material usage variance. (3 marks) (mii) Direct labour rate variance. (2 marks) (iv) Direct labour efficiency variance. (3 marks) (v) Variable production overhead expenditure variance. (2 marks) (vi) Variable production overhead efficiency variance. (3 marks) (c) Calculate (i) Sales price variance (2 marks) (1i) Sales volume contribution variance. (3 marks) (d) Give two possible reasons for an adverse sales price variance. (2 marks)(B) (20 marks) Primer Bhd produces three products which have the following information in period 2: Product A Product B Product C (RM unit) (RM unit) (RM unit) Selling price 30.00 17.00 21.00 Variable cost 13.00 6.00 9 00 Fixed production cost 10.00 8 00 6.00 Maximum demand 150 140 130 Fixed production costs are absorbed using a machine hour rate of RM2 per machine hour. The company has only 1,400 machine hours are available in period 2. You are required to : (a) List the products in the order of their production priority (i.e. the most profitable product first). (9 marks) (b) Based on the ranking in (a) and given that machine hour is the limiting factor, calculate the followings in tabular form: (i) Number of units to be produced by each of the products; and (ii) Profits earned by the company if the fixed costs for period 2 are RM3,000. (7 marks) The company is evaluating whether to enter into a new contract which require 100 hours of skilled labour and 200 hours of semi-skilled labour. Currently, all the skilled labour hours have been used for production of product M except for a spare capacity of 20 hours. To take up this new contract, some of the skilled workers will be taken from the existing production and the company will suffer some loss of sales. Each unit of product M generates a contribution of RM10 and needs two skilled labour hours to produce it. The skilled labour hour rate is RM12 per hour. Semi-skilled workers are hired as and when they are required and they are paid RM8 per hour. You are required to: (c) Calculate the total relevant labour cost of the new contract. (4 marks)