Jasmine Limited makes a single product, X, using a single raw material P. Standard costs relating to X have been calculated as follows

Standard cost schedule

	per unit (RS)
Direct material, P, 100kg at Rs.5 per kg	500
Direct labour, 10 hours at Rs.8 per hour	80
Variable production overhead, 10 hours at Rs.2 per hour	20
Fixed production overhead, 10 hours at Rs.1 per hour	10
Standard cost	610
Standard profit	290
Standard selling price	900

Relevant details of this production are as follows.

• Company expects to produce 1020 units in month of December 2020.
• During December, 1000 units of product X were produced and sold at Rs. 975,000
• 90000 kgs costing Rs.720000 were bought and used.
• 8200 hours were worked during the month and total wages were Rs. 63,000.
• The actual variable production overhead for the month was Rs. 25,000.
• The actual fixed production overhead for the month was Rs. 9,800.
• Actual profit was Rs. 157,200.

1. Identify possible causes for the variances and recommend corrective actions for adverse variances. (10 marks)