Question Four Running Woman Inc. manufactures and sells running machines to ladies-only gyms in and around Abuja, Nigeria. You have just been employed as the management accountant and your first job is to prepare the variance report for the month of June. Running Woman Inc. has a policy of holding no inventory or completed goods because they follow a just-in-time policy. You are provided with the following information for the month of June when 10,000 units were budgeted for production and sales: Standard selling price 1,000 Standard variable costs per unit: 100kg of material @ N5 per 500 kg 4 labour hours @ N25 per 100 hour N is the symbol of the Naira, the Nigerian currency At the end of June, you are provided with the following actual information where 9,500 units were actually produced and sold: 1,100 Actual selling price Actual variable costs 997,500 kg at N4.80 per kg 36,100 hours @ N30 per hour Required: a) Calculate the following variances (12 marks): i) ii) iii) iv) v) Sales volume contribution variance Selling price variance Direct material price variance Direct material usage variance Direct labour rate variance Direct labour efficiency variance vi) b) Give a brief explanation of what may have occurred for all variances you have calculated in part (a). Avoid giving general explanations - they need to fit the calculated variances. (5 marks) c) Variance analysis is a type of results/output control. Another type are action behaviour controls. State their main characteristic, and list the three forms these action/behaviour controls can take, and briefly explain each one of them. (8 marks) Total 25 marks