The L Company produces one product whose standard cost for the year 20x3 was as follows: Direct materials $40.00 Direct labour 40.00 Manufacturing overhead 23.75 $103.75 Direct materials are purchased at $8 per Kg and each unit required about 5kg, Direct Labour requires 2.5 hours at $16 per hour. Manufacturing Overhead is applied on the basis of Direct Labour hours. Each unit requires 2.5 Direct labour hours at a rate of 9.5 The denominator level of activity is 40,000 hours and the total budgeted fixed overhead is $180,000. The budgeted selling price of the product is $145. At the end of 20x3, the following actual results are produced by the accounting department: Units produced and sold 18,000 Selling price $155 Direct labour hours 39,750 Total direct labour cost $606,187.50 Direct materials purchased 110,000 kg Average cost of direct materials purchased $9.35 Variable overhead $106,000 Fixed overhead $175,000 Direct material used 88,750kg Required - a. Prepare a Flex budget financial statement with the Information above (6 marks) b. Calculate the following cost variances. L direct materials price and quantity variance (4 marks) it. direct labour rate and efficiency variance (4 marks)