Matrix Ltd uses a standard marginal costing system. Details relating to the Neo, the only product that it manufactures are as follows:

	Standard Costper Neo
Materials	4 Kg @ 11 per Kg	44
Labour	5 hours @ 9 per hour	45

Budgeted output for the year was 900 Neos. Budgeted fixed costs were 50,000. During the year ended 31^st May 2023, the actual results were as follows:

Output: 950 Neos

Materials: the total cost of the 3,900 Kgs purchased and used was38,500

Labour: the workers were paid 44,000 for working 5,000 hours.

REQUIRED:

Part (a)

1. Prepare a Flexed budgetto reflect the actual level of production.

1. Calculate the following variances:

Overall Material Variance Material Usage

Material Price

Overall Labour Variance Labour Rate

Labour Efficiency

Part (b)

Suggest possible reasons for the following variances that you have calculated: Sales Price

Material Usage Labour Efficiency