Question 5 (15 marks) Middleton Company (Middleton) manufactures and sells car video players. Middleton uses a standard product costing system, and overhead rates are predetermined based on the practical capacity of 250,000 units. The budgeted manufacturing costs for production at 200,000 and 250,000 units as well as the actual manufacturing costs for the production of 240,000 units in March are as follows: Budget Actual Production (units) 200,000 250,000 240,000 Direct materials Direct labour Supplies Maintenance Power Supervision Amortization Other overhead (mixed) Total manufacturing costs $ 7,800,000 $ 9,750,000 9,600,000 12,000,000 1,000,000 1,250,000 200,000 200,000 400,000 500,000 300,000 300,000 800,000 800,000 2,500,000 2,875,000 $22,600,000 $27,675,000 $ 9,430,000 11,550,000 1,180,000 205,000 482,000 358,000 800,000 2,840,000 $26,845,000 Required: a) Determine the standard cost per unit. Include one variable overhead rate and one fixed overhead rate in computing the standard cost. (6 marks) b) Prepare a flexible budget. (3 marks) c) Calculate the following variances and explain Middleton's production performance in March based on the results of each variance: i) Flexible budget production cost variance (3 marks) ii) Fixed overhead production volume variance