Padu Rancak Sdn Bhd uses variance analysis as a method of cost control. The following information is available for the year ended 31 July 2020:

a) Compute the following variances:

(i) Material price variance

(ii) Material usage variance

(iii) Labour rate variance

(iv) Labour efficiency variance

(v) Overhead efficiency variance

(vi) Overhead volume variance

b) Discuss TWO (2) reasons to explain why the variances occur

c) Explain any possible interrelationships between some of the variances. (

Budgeted production for the year Standard cost per unit: Direct materials (3kg at RM10/kg) Direct labour (4 hours at RM6/hour) Overheads (4 hours at RM2/hour) 12,000 units RM 30 24 8 62 11,500 units 43,350 hours RM300,000 37250 kg RM345,000 Actual production units for year Actual labour hours for the year Actual labour cost for the year Actual materials used in the year Actual materials cost for the year