Question 2 Elso Ltd (“Elso”) manufactures large-scale solvents for factories and household cleaning. The company uses standard costing system as a way of monitoring its cost. The following information is available for Elso for the month of July 2022: Elso Ltd (“Elso”) manufactures large-scale solvents for factories and household cleaning. The company uses standard costing system as a way of monitoring its cost. The following information is available for Elso for the month of July 2022:  Budgeted  Sales and production volume 600 barrels   Standard selling price per barrel N$1 750   Standard variable cost per barrel N$855       Actual Sales and production volume 620 barrels   Actual selling price per barrel N$1 690   Actual variable cost per barrel N$863 Additional information: Standard cost card for one barrel of solvent Direct materials 34 litres @ N$15 per litre Direct labour 15 hours @ N$12,50 per hour Variable overheads 15 hours @ N$10,50 per hour NB: Overheads are absorbed on the basis of direct labour hours.                   Actual cost and usage information         Total usage Total cost (N$) Direct materials 20 410 litres N$321 500 Direct labour 9 420 hours N$117 800 Variable overheads ? N$95 600   REQUIRED:  Marks Sub- total Total Calculate the following variances and indicate whether the variance obtained is favourable or unfavourable     2.1 Material price variance 3 3 2.2 Material usage variance 3 6 2.3 Labour rate variance 3 9 2.4 Labour efficiency variance 3 12 2.5 Variable overheads expenditure variance 3 15 2.6 Variable overheads efficiency variance 3   18 2.7 Explain the possible causes of the type of variance obtained in 2.1 and 2.3? 2   20 TOTAL MARKS 20