The Ebonie Manufacturing Company's costing system has two direct cost categories: direct

materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is

allocated to products on the basis of standard direct manufacturing labour-hours (DLH). At the

beginning of 2022/2023, Ebonie adopted the following standards for its manufacturing costs:

Standards Input Cost per Output Unit s Manufacturing Overhead Variable Standard Manufacturing Cost per Unit S 6.00 perDLH $30.00 3. __- -_- s Actual Costs Direct Materials Purchased 25,000.00 S 5.20 Direct Materials Used 23,100.00 --- Direct Manufacturing Labour 40,100.00 $ 14.60 Total Actual Manufacturing Overhead [Variable St Fixed} $ 600,000.00 - Actual Production 2,800.00 Output Units 3 Discuss at least 2 possible reasons for each of the above variances. [8 marks] 4 Explain the importance of performing variance analysis as part ofthe management accounting function? [6 marks] 5 Explain how management will use the results ofthis variance analysis. [6 marks]