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In: AccountingQuestion : Variance AnalysisThe following standard cost data relate to the operation ofDragon Company...Question : Variance AnalysisThe following standard cost data relate to the operation ofDragon Company for 2016. The standard cost per unit is based on thenormal annual production of 15,000 units.Standard cost per unitDirect materials4kg @ $5.00 per kg$ 20.00Direct labour2hrs @ $12.50 per hr$ 25.00Variable overhead2hrs @ $3.00 per hr$ 6.00Fixed overhead2 labour hrs @ $5.00 per hr$ 10.00Total$ 61.00Actual production in 2016 was 10,000 units. The following datawas obtained from Dragon Company’s records:Direct material purchases 45,000KilogramsCost of direct materials purchases$ 202,500Actual direct labour hours 25,000HoursActual direct labour costs$ 325,000Actual variable overhead costs$ 100,000Actual fixed overhead$ 125,000Required:3a. Calculate and show flexible budget variance for each costitem.3b. Calculate the following variances and indicate whether they arefavourable or unfavourable.v.Variable manufacturing overheadspending variancevi.Variable manufacturing overheadefficiency variancevii.Fixed manufacturing overheadspending varianceviii.Fixed manufacturing overheadefficiency variance