(Time recommended: 17 minutes) MU Ltd has acquired and started manufacturing their products in GSM Ltd. MU Ltd wants to evaluate their production efficiency with regard to one of their top selling products - MU soccer balls. Budgeted production was 18,500 units with the following standard costs for inputs per unit: Standard Usage per Standard Cost ball Direct Material $2.45 per kg 0.7 kg Direct Labour $20.50 per hour 0.9 hours 4 Actual operating results for the year were as follows: Finished Goods Inventory: Beginning inventory at the start of the 17,500 units year Closing inventory at the end of the 1 100 nite for the year were as follows: 17,500 units 16,400 units 19,200 units Finished Goods Inventory: Beginning inventory at the start of the year Closing inventory at the end of the year Inventory sold during the year Direct Material: Beginning Raw Material at the start 21,500 kg of the year Closing Raw Material at the end of 21,700 kg the year Raw Material purchased during the 13,200 kg at an actual cost of year $33,000 Direct Labour: 15,750 hours Actual Hours worked $335,475 Actual Cost Direct Material: Beginning Raw Material at the start of the year 21,500 kg Closing Raw Material at the end of 21.700 kg the year Raw Material purchased during the 13,200 kg at an actual cost of year $33,000 Direct Labour; Actual Hours worked 15,750 hours $335,475 Actual Cost Required: 1. Calculate the two Direct Material variances, clearly classify each as Favourable (F) or Unfavourable (U), and interpret what each variance is indicating about the Business (4 marks) Direct Material Price Variance = $ Interpretation: Interpretation: 2. Calculate the two Direct Labour variances, clearly classify each as Favourable (F) or Unfavourable (U), and interpret what each variance is indicating about the business (4 marks) Direct Labour Rate Variance = $ Interpretation: Direct Labour Efficiency Variance = $ Interpretation: Note: Please round your responses to 2 decimal places where applicable. Hint: You are able to calculate the number of units produced using the Intion and the amount of raw materials used using the mus Direct Labour: Actual Hours worked Actual Cost 15,750 hours $335,475 Required: 1. Calculate the two Direct Material variances, clearly classify each as Favourable (F) or Unfavourable (U), and interpret what each variance is indicating about the business (4 marks) Direct Material Price Variance = $ Interpretation: $ Direct Material Usage Variance = Interpretation: 2. Calculate the two Direct Labour variances, clearly classify each as Favourable (F) or Unfavourable (U), and interpret what each variance is indicating about the business (4 marks)