Section B: Comprehensive Problems (70 Marks) QUESTION 5: Variance Analysis (15 marks] Since preparing the master budget for Elvio" Fox ice blox for 2021 you have been asked to review their first quarter (Q1) performance and prepare direct materials and direct labour variance calculations ready to present to the owners at your next meeting Use the following information: Direct Materials Budget Assumptions Kilos of fruit per carton Cost per Kilo of fruit Percentage of purchases paid in the quarter purchased Percentage of purchases paid in the quarter after purchase Direct Labour Budget Assumptions Direct labour-hours required per carton Direct labour cost her hour Budget 15 $ 1.20 50% 50% 0.8 25.84 Manufacturing Overhead Budget Assumptions Variable manufacturing overhead per direct labour-hour Fixed manufacturing overhead per quarter Depreciation per quarter 4.00 60,600.00 15,000.00 Direct Materials Budget Schedule (in Cartons) Required production (cartons) Kilos of fruit needed per carton (kg) Kilos of fruit needed to meet production (kg) Add desired kg of fruit ending raw materials inventory Total kilos of fruit needed Less Kilos of beginning raw materials inventory Kilos of fruit/raw materials to be purchased Cost of fruit/raw materials per kg Cost of fruit/raw materials to be purchased BUDGET 9,600 15 144,000 16,650 160,650 21,000 139,650 $ 1.20 $167 580 Focus Required: 1. If the actual production (in cartons) for Q1 was 8,900 and the cost per kg was $1.60, complete the Actual Direct Materials and Variances below. Assume all other budget assumptions were realised. [8 marks) Direct Materials Budget Schedule (In Cartons) ACTUALS VARIANCE Required production (cartons) Kilos of fruit needed per carton (kg) Kilos of fruit needed to meet production (ke) Add desired kg of frult ending raw materials inventory Total Kilos of fruit needed Less Kilos of beginning raw materials inventory Kilos of frult/raw materials to be purchased Cost of fruit/raw materials per kg Cost of fruit/raw materials to be purchased BUDGET 9,600 15 144,000 16,650 160,650 21,000 139,650 $ 1.20 $167.580 2. Calculate the Direct Materials Price Variance and Direct Materials Efficiency Variance to indicate what caused the total variance in the cost of the materials purchased. [4 marks) 3. Provide one reason why the cost of the frult/raw materials per kg increased in Q1. [2 marks]