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Question 2: (40 marks) Horton Company manufacturespaint pens The following unitary standards have been set by the production staff and the controller: Direct Material: Direct Labor: Quantity, 0.4 Liters Quantity, 0.2 hour Price. $4.5 per Liter Price, $6 per hour Actual costs incurred in the production of 10,000 paint pens were as follows: Direct Material: $13.500 for 4.500 Liters Direct Labor: $14.400 for 1.800 hours Required: 1- Using the variance formulas to compute the direct-material and labor variances Indicate whether each variance is favorable or unfavorable (30 marks) 2- Mention at least 3 reasons why each of these variances may have occurred (10 marks)Question 4: (35 marks) Helmond Electronic Manufacturing (HEM) generated salesin December 2019 that amounted to $60,000 and which are expected to rise by $6,000 per month for the next 5 months. Of these sales. 80 per cent are to be collected during the month of sale and the rest two months after sales. The cost of salesis 60 per cent of sales and, the company plans to keep an inventory at the end of each month equal to forty per cent of the anticipated salesfor the next month's sales. Suppliers are paid one month after purchases are made. Monthly wages amount to $3,600. rent and heating $900 and depreciation $600. HEM have planned to purchase a machine in February for $5,000 to be paid in cash. The purchase of the machine will mean that the monthly change for depreciation will increase by $50. The inventory held at January Ist is $1 4.560. Required: 1. Calculate the estimated cash collection from salesfor February and March.(6 marks) 2. Calculate the purchasesfor February and March. (10 marks) 3. Assuming that the cash balance at 31/01/2020 is $10,000; prepare a cash budget for the two months ending March 31, 2020.(17 marks) 4. Discuss whether the company will be able to repay a loan of $60,000 at the end of March.(2 marks)