The extracts given below were obtained from the records of Mountain View Ltd for the month of October 2019.

Extracts of Production and Sales Budget

Budgeted Production and Sales 4000 units

Kes per unit

Selling Price 600

Direct Material (14kgs@ Kes 40 perKg) 560

Direct Labour 10 hrs@ Kes 20 per hour) 200

Fixed overheads( 10 Direct labour hrs@ Kes24/hr) 240

Additional information is available as follows

Actual Production and Sales 4,400 units Kes per unit

Actual Selling price 580

Actual Costs

Direct Material 16Kgs@ Kes36 per Kg) 576

Direct Labour 8 hrs@ Kes 24 per hr) 192

Total actual fixed overheads for the month 260,000

Required

1. Direct material price and usage variances (6 Marks)
2. Direct labour rate and efficiency variances (6 Marks)
3. Fixed overhead expenditure, capacity and efficiency variances (8 marks)