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(31 MARKS QUESTION 5 Mascot Ltd. has provided you with the following budgeted and actual data for the period ending 30th April 2013 The standard cost information at the beginning of the period was based on an expected activity of 10,000 units. Direct Material: The specification per unit produced is 12kg @ P10 per kg. Direct Labour: The standard time allowed per unit is 8 hours @ P6 per hour. Overheads: All overheads are variable in nature and for the period they are budgeted at P160, 000. Company policy is to absorb overheads at a predetermined rate per labour hour. Selling Price is expected to be P200 per unit. At the end of the period the actual results were as follows: Sales Revenue: P2880 000 representing 12 000 units sold. Material: 160 000 kg were used at a cost of P1440 000. Labour: 108 000 hours were worked at a cost of P756 000. Overheads: Actual expenditure P240 000 Required: a. Prepare a standard cost card showing the cost and profit per unit and the overall budgeted profit for the period. (6 marks) b. Calculate the actual profit for the period. (4 marks) c. Calculate the following variances: i. Material variances (price and usage). (4 marks) ii. Labour variances (rate and efficiency). (4 marks) iii. Overhead variances (rate and efficiency). (4 marks) iv. Sales variances (price and volume). (4 marks) d. With the use of an example, explain the concept of "inter-relationship between variances

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