AKEI is an elite desk manufacturer. At the start of May 2018, the following budgeted unit amounts (based on a standard costing system) related to its manufacture of executive desks (made out of oak): 

Direct materials: 16 square metres of oak per desk at €20 per square metre 

Direct manufacturing labour: 3 hours per desk at €30 per direct manufacturing labour-hour 

Budgeted production for May 2018 was 700 executive desks. There were no opening stocks of direct materials or finished goods on 1 May 2018. Work in progress is minimal. 

Actual results for May 2018 are as follows: 

Direct materials purchased (12,640 square metres) ...................................................................... €259,120 

Direct materials used (11,850 square metres) ..................................................................................... ? 

Direct manufacturing labour (2325 hours at €31 per hour) ............................................................. ? 

Actual production in May 2018 is 750 executive desk units. The purchase price for oak wood remained unchanged throughout May 2018. 

Required 

1. Prepare a detailed flexible-budget variance analysis for May 2018 covering direct materials and direct manufacturing labour. 

2. Give two explanations for each of the variances you calculate in requirement 1.