Company ABC has suffered severe losses over the years. This situation has arisen partially because of bad industrial relations and poor management control. An extract from the standard cost system report relating to the first 3-month period reveals:

Required:

(a) Calculate 3 variances from the extract given ( including the total variances) (12 marks)

(b) Discuss the meaning of the 3 variances explaining how poor morale and management show themselves in reported variances (8 marks)

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