Since preparing the master budget for LEGO's sustainability range for FY 2022/23 (in your assignment) you have been asked to review their first month's (July) performance and prepare direct materials and direct production variance calculations ready to present to the Head of Sustainability, LEGO Australia at your next meeting.

Use the following information:

Budgeted Direct Materials cost per LEGO pack

	Plant Based Bricks	Packaging
LEGO PACK 1: The Monkey Kid	$ 52.75	$ 14.25
LEGO PACK 2: Minions	$ 38.50	$ 22.50
LEGO PACK 3: Classic	$ 18.20	$ 3.75

Budgeted Manufacturing Time/Production Machine Hours per product:

$ 38.50	per hour
LEGO PACK 1: The Monkey Kid	1	hour
LEGO PACK 2: Minions	0.75	hours
LEGO PACK 3: Classic	0.4	hours

Production Budget	DM Cost	July
LEGO PACK 1: The Monkey Kid	$ 67.00	80
LEGO PACK 2: Minions	$ 61.00	1350
LEGO PACK 3: Classic	$ 21.95	1000
Direct Materials used in production
LEGO PACK 1: The Monkey Kid	$ 5,360
LEGO PACK 2: Minions	$ 82,350
LEGO PACK 3: Classic	$ 21,950
Total Direct Materials Used	$ 109,660
Target Ending Direct Materials Inventory	$ 24 609
Less Beginning Direct Materials Inventory	$ 54,275
Total Purchases of Direct Materials	$79,994

Budgeted Direct Production
Direct Production Cost Required:	Time	Cost	Total
LEGO PACK 1: The Monkey Kid	1.00	$ 38.50	$ 38.50
LEGO PACK 2: Minions	0.75	$ 38.50	$ 28.88
LEGO PACK 3: Classic	0.40	$ 38.50	$ 15.40
Production Budget	DP Cost	July Units	July Cost
LEGO PACK 1: The Monkey Kid	$38.50	80	$ 3,080
LEGO PACK 2: Minions	$28.88	1350	$ 38,981
LEGO PACK 3: Classic	$15.40	1000	$ 15,400
Total Direct Production Cost Used			$ 57,461

Required:

1. If the actual production units and costs for July were as below, complete the Actual and Variance columns (highlighted in the grey section of the 3^rdtable below).

[10 marks]

Actual unit costs	Plant Based Bricks	Packaging
LEGO PACK 1: The Monkey Kid	$ 52	$ 14
LEGO PACK 2: Minions	$ 40	$ 22
LEGO PACK 3: Classic	$ 17	$ 5

Actual Production Budget	DM Cost	July
LEGO PACK 1: The Monkey Kid	$ 68.00	90
LEGO PACK 2: Minions	$ 62.00	1300
LEGO PACK 3: Classic	$ 22.00	1010

Direct Materials cost used in production	Budget	Actuals	Variance	F/U
LEGO PACK 1: The Monkey Kid	$ 5,360
LEGO PACK 2: Minions	$ 82,350
LEGO PACK 3: Classic	$ 21,950
Total Direct Materials Used	$ 109,660

2. Calculate the Direct Materials Price Variance and Direct Materials Efficiency Variance forPack 1: The Monkey Kidto indicate what caused the total variance in the cost of the materials used in production. Indicate whether the resulting variance is favourable or unfavourable [5 marks]

3. Provide two (2) potential reasons why the cost of the plant based direct materials and packaging may have decreased in July. [5 marks]