3.1 Calculate and write the total standard cost per unit.

(5 marks)

3.2 Arrange/Write a flexible budget based on the information provided as well as your answers in 3.1.

(4 marks)

3.3 Calculate the following variances and clearly indicate for each variance whether it is a favourable or an unfavourable variance:

3.3.1 Direct material variances (Price and Usage)

(6 marks)

3.3.2 Direct labour variances (Rate and Efficiency)

(6 marks)

• 3.3.3 Variable manufacturing overhead variances (Rate and Efficiency) (6 marks)
• 3.3.4 Fixed manufacturing overhead variances (Expenditure and Volume)

QUESTION 3 (32 marks) Sheep Coats Ltd manufactures wool coats. The company uses a standard costing method. The information below applies to the activities of Sheep Coats Ltd for the nancial year ended 31 March 2023. The actual production is 6 000 units and costs in Rands for the period were as follow: Cost component \" Direct material 8 400 metres @ R22 per metre 184 800 Direct labour 4 000 hours @ R20 per hour 80 000 Variable manufacturing overheads 4 000 hours @ R750 per hour 30 000 Fixed manufacturing overheads 45 000 There is no change in the opening and closing inventory of material. Accordingly, the quantity purchased equals the quantity used. The standard cost card for the wool coats is as follow: _m Direct material _ 1.3 metres; R20 per metre Direct labour R18 per hour Variable manufacturing overheads R8 per hour Fixed manufacturing overheads _ R6 per unit The normal production is 7 000 units per annum