Question 3 Musictop Limited designs and manufactures violins. The company achieved the following results from its most popular model, the Reno violin, for the year ended 31 December 2018: Actual sales revenue was 423,000 with 1,410 violins sold; Actual cost of material was 183,200 with 7,328 kgs used; Actual labour hours were 9,200 hours at an hourly rate of 12.50; Variable overheads were 4 per labour hour; Fixed overheads were 16,000. The original budget for 2018 was as follows: Sales (1,500 units) 435,000 Variable costs: Materials (7,500 kgs) Labour (9,300 hours) Overheads (4.20 per labour hour) Contribution Fixed overheads Budgeted profit 172,500 106,950 39,060 (318,510) 116,490 (17,500) 98.990 All violins produced in the year are sold in the year. Requirement (a) Reconcile the budgeted profit and the actual profit for the year ended 31 December 2018 showing all appropriate variances. 14 Marks (b) For the labour variances, write a brief explanation as to what information they provide for management 4 Marks (c) Evaluate the usefulness of standard costing in management control systems. 7 Marks Total 25 Marks