Zinn Corporation recently agreed to a union contract provision that guarantees a minimum wage of $2,030 per month to each direct labour employee equivalent to 145 hours of work each month. Currently, 145 employees are covered by this provision. All direct labour employees are paid $14 per hour. Thus, until an employee works 145 hours, the remuneration is a fixed $2,030 per employee each month. Rusty Zinn, the assistant to the accountant was given the task of budgeting for the direct labour cost. Because of the contract provision, Rusty decided that the $294,350 (=145 * $2030 per month) should be treated as a fixed monthly cost. Rusty was instructed to calculate each month's budget using the following formula: $294,350 - $9 per direct labour-hour. Figures for the first three months of the fiscal year are as follows: April May June Direct labour-hours planned and worked 28. 508 44,080 64,080 Direct labour costs budgeted $ 558, 858 698, 350 870,350 Direct labour costs incurred $ 399, BOE 616,088 895, 080 Variance 151, 858 F 74,350 F 25,658 0 These figures are a source of concern because they show unfavourable variances when production is high, and favourable variances during slow months. The factory manager is certain that this trend does not reflect reality. Required: 1. This part of the question is not part of your Connect assignment. 2. Develop a formula for direct labour costs more appropriate to the actual cost behaviour, then recalculate the variances for April, May, and June. April May June