QUESTION Three The efficiency of management, among other things, depends upon the effective control of costs. For controlling costs, management should not only know actual costs-the costs actually incurred, but also predetermined costs-the costs which should have been incurred. The system of standard costing is the most efficient way of controlling costs. It provides criteria to evaluate and compare the operating performance of executives. Standard costing system is meaningful to management only when variances are computed and properly analyzed. The three principal objectives of variance analysis system are: performance evaluation, cost control and management by exception The standard cost of manufacturing one unit of a product for a KIMIRONKO-based firm is as follows: Materials (4units @ 200 frw) Labour (2hrs. @ 300 frw) 800 frw 600 frw Manufacturing overhead: Variable (2 hrs. @ 300 frw) Fixed (2 hrs. @ 400 frw) 600 800 2800 frw The total production was 60,000 units during the year 2016n.materials purchases for the year were 280,000 units at a price of 230 frw per unit. The material usage for the year amounted to 250,000 units. The direct labour hours used were 110,000 hours and were paid at 370 frw per hour. Compute the following variances and in each indicate whether they are favourable or unfavourable: (i) Materials purchase price variance;(ii) materials usage variance; (iii) Total materials cost variance; (iv) labour rate variance; (v)labour efficiency variance and (vi) Total labour cost