QUESTION 5 (20 MARKS 36 MINUTES Elso Ltd Elso") manufactures large-scale solvents for factories and household cleaning. The company uses standard costing system as a way of monitoring its cost. The following information is available for Elso for the month of August 2021 Budgeted Sales and production volume 600 barrels Standard selling price per barrel N$1 750 Standard variable cost per barrel N$855 Actual Sales and production Volurie Actual selling price por barrel Actual variable cost per barrel 620 barrels N$1 690 N5863 Additional information: Standard cost card for one barrel of solvent Direct materials 34 litres @ N$15 per litre Direct labour 15 hours N$12,50 per hour Variable overheads 15 hours @ N$ 10,50 per hour NB: Overheads are absorbed on the basis of direct labour hours. Actual cost and usago Information Total usage Direct materials Direct labour Variable overheads Total cost (NS) 20 410 litres N5321 500 9 420 hours N$117 800 N$95 800 REQUIRED: Calculate the following variances and indicate whether the variance obtained is favourable or unfavourable. MARKS 5.1. Material price variance 3 5.2. Material usage variance 3 5.3. Labour rate variance 3 5.4. Labour efficiency variance 3 5.5. Variable overheads expenditure variance 3 5.6. Variable overheads efficiency variance 3 5.7. Explain the possible causes of the type of variance obtained in 5.1 and 5.3? 2 TOTAL MARKS 20