Scent Sdn. Bhd. manufactures long-lasting air fresheners. The company is owned by Kila, Sabrina, Azwan, and Laila. One of its famous products named Permai is sold for RM50 each unit. At the end of December 2019, Kila the director had decided to use the following standard costing for each unit of Permai: Standard costs per unit: Raw materials (1.5 grams @ RM16 per gram) =RM24.00 Direct labour (0.75 hour @ RM10 per hour) =RM7.50 Variable overhead (0.75 hours @ RM3 per hour) =RM2.25 Fixed production overhead =RM5.25 Total =RM39.00

Actual information for the current year: The unit produced and sold =22,400 units Purchased and used raw materials (44,800 grams @ RM17 per gram) =RM761,600 Direct labor (17,920 hours @ RM9 per hour) =RM161,280 Variable overhead (17,920 hours @ RM2.8 per hour) =RM50,176 Fixed production overhead =RM112,000

Additional information: Variable and fixed production overhead costs were absorbed based on direct labor hours and production units respectively. The budgeted annual sales were 20,000 units and the standard selling price was RM45 per unit.

Required: a. Calculate the following variances: i. Direct Material Price and Usage variances. ii. Direct Labour Rate and Efficiency variances. iii. Variable Overhead Expenditure and Efficiency variances. iv. Fixed Production Overhead Expenditure and Volume variances. v. Sales Margin Price and Volume variances. b. State TWO (2) reasons for each of the following variances; i. An adverse material price variance. ii. A favorable direct labor efficiency variance.