QUESTION 1 Timerz Ltd uses a standard costing system. The standard quantity of direct materials for the product is 3 kg per unit, whereas the standard price of materials was $5.00 per kg. The company record shows the following: Standard direct labour hours is 2.5 hours per unit. During the month, the actual hours worked by the company was 130,000 labour hours and the actual direct materials purchased and used by the company amounted to 170,000 kg. According to the production manager, the standard labour rate was $15.00 per labour hour. The purchasing manager revealed that the actual purchase price of the materials was $5.30 per kg. Timerz's actual variable overhead cost for the month amounted to $235,000. The company's actual wage rate for the period was $14.60 per labour hour. The company allocates overhead on the basis of machine hours. The actual total machine hours for the period was 70,000 machine hours. The standard machine hour for each unit of the product is 1.5 machine hours and the variable overhead rate is $3.50 per machine hour. The actual production for the month of Oct was 50,000 units. Required: (a) Calculate the following variances : (i) All necessary direct material variances (ii) All necessary direct labour variances (iii) All necessary variable overhead variances (15 marks) (b) Comment and discuss on all variances computed above. (9 marks)