Question 3: Variance Analysis (20 marks in total) The followingstandard cost data relate to the operation of Dragon Company for2016. The standard cost per unit is based on the normal annualproduction of 15,000 units. Standard cost per unit Direct materials4kg @ $5.00 per kg $ 20.00 Direct labour 2hrs @ $12.50 per hr $25.00 Variable overhead 2hrs @ $3.00 per hr $ 6.00 Fixed overhead 2labour hrs @ $5.00 per hr $ 10.00 Total $ 61.00 Actual productionin 2016 was 10,000 units. The following data was obtained fromDragon Company’s records: Direct material purchases 45,000Kilograms Cost of direct materials purchases $ 202,500 Actualdirect labour hours 25,000 Hours Actual direct labour costs $325,000 Actual variable overhead costs $ 100,000 Actual fixedoverhead $ 125,000 Required: 3a. Calculate and show flexible budgetvariance for each cost item. 3b. Calculate the following variancesand indicate whether they are favourable or unfavourable. i.Directmaterial price variance ii.Direct material efficiency varianceiii.Direct labour price variance iv.Direct labour efficiencyvariance v.Variable manufacturing overhead spending variancevi.Variable manufacturing overhead efficiency variance vii.Fixedmanufacturing overhead spending variance viii.Fixed manufacturingoverhead efficiency variance