The Mantin plant of Johans Small Motor Division produces an engine part for motorcycles. The plant uses a standard costing system for production costing and control. The standard cost sheet for the engine part is as follows:

Direct materials (7 kg @ RM6)	RM 42
Direct labour (2 hours @ RM12)	RM 24
Variable overhead (2 hours @ RM10)	RM 20
Fixed overhead (2 hours @ RM6)	RM 12
Standard unit cost	RM 98

During the year, the Mantin plant had the following actual production activity:

a) Production of the engine parts total 70,000 units.

b) A total of 465,000 kg of materials was purchased at RM5.80 per kg.

c) There were 26,400 kg of materials in beginning inventory (carried at RM6 per kg). There was no ending inventory.

d) The company used 150,000 direct labour hours at a total cost of RM1,950,000.

e) Actual fixed overhead totaled RM913,000.

f) Actual variable overhead totaled RM1,470,000.

The Mantin plants normal production activity is 75,000 units per year. Standard overhead rates are computed based on normal production activity measured in standard direct labour hours.

Required:

i) Compute the material price variance and material usage variance.

ii) Compute the labour rate variance and labour efficiency variance.

iii) Compute the variable overhead spending variance and variable overhead efficiency variances.

iv) Compute the fixed overhead budget (spending) variance and fixed overhead volume variance. Interpret the fixed overhead volume variance. What can be done to reduce this volume variance?