Rocking Horses Limited produces luxury vintage wooden rocking horses for children. Expected production for this product for January is 3,000 units. Budget information for this product is as follows: 1. Direct material - each unit of production requires 20kg of raw material, which costs 5 per kg. 2. To produce one rocking horse requires ten labour hours at 10 per hour. 3. Variable production overheads are charged at the rate of 3 per unit produced. 4. Fixed production overheads for the month are budgeted at 7,000. Actual figures for the month of January were: Direct Material Cost Direct Labour Cost Direct Labour Hours Incurred Variable production Overheads Fixed Production Overheads 305,000 290,000 Figure not provided 7,800 7,100 The following additional information may also be relevant: a) Rocking horses feels that its supplier of materials is taking the business of Rocking Horses for granted. b) Staff have recently been on a training course to update their knowledge about using machinery Prepare an expenditure budget monitoring statement for Rocking Horses Limited for the month of January which shows the variance of budgets to actual figures and whether each variance is favourable or not favourable. Select significant variances and suggest why these may have occurred. Suggest reasonable actions Rocking Horses could take to reduce these variances in the future.