Task 2 Purpose: To enable students in using variance analysis for the purpose of benchmarking when evaluating performance and to further control organisational output, efficiency and sustainability Requirement: Standard Costing & Variance Analysis Delic plc. is a manufacturer of cakes that makes a wide range of cakes. It operates a standard marginal cost accounting system. Given below, is information relating to one of its products, L.e. birthday cakes, which are made in one of the company departments Standard marginal product cost Birthday cakes per unit (S) Direct material (6 kgs at $4 per kg) Direct labour (1 hour at $7 per hour) Variable production overhead 24 -3 34 Variable production overhead varies with direct labour hours of input Budgeted fixed production overhead per month is $100,000 Budgeted production for birthday cakes is 20,000 units per month - Actual production and costs for one of the months were as follows:- Units of birthday cakes produced 18,500 units 442,650 129,940 58,800 104,000 735.390 Direct materials purchased and used, 113,500kg Direct labour, 17,800 hours Variable production overhead incurred Fixed production overhead incurred Required: (a) Prepare a statement showing, by cost elements (i.e. direct materials; direct labour variable overhead; and fixed overhead), the: (0) original budget (i) flexed budget (il) actual cost (iv) total variances (2 marks) (2 marks) (1 mark) (3 marks) (b) To be more informative for managerial purposes, prepare the following variances (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (Total: 20 marks) (i) Material price variance (ii) Material usage variance (ii) Wage rate variance (iv) Labour efficiency variance (v) Variable overhead expenditure variance (vi) Variable overhead efficiency variance