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Shale Pty Ltd has a standard variable overhead rate of $5 per direct labour hour. The standard quantity of direct labour per unit of production

Shale Pty Ltd has a standard variable overhead rate of $5 per direct labour hour. The standard quantity of direct labour per unit of production is 3 hours. The company's static budget was based on 50,000 units. Actual results for the year are as follows. Actual units produced 45,000 Actual direct labour hours 100,000 Actual variable overhead $765,000 The time has come for the company to compare of actual results with planned results.

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Provide evidence and justify whether there has been a budgetary slack when planning the results. (6 marks)

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