Actual results for the vear ended 31 December 2023 Notes: 1. 80000 units were sold during the year because of an aggressive marketing campalgn conducted by Chula Chula during the year. 2. Total material used was 280000 metres for the year, made up of - 154000 metres of cotton was used during the year. - 126000 metres of Wool was used during the year. The exchange rate also unexpectedly increased to NS11.50.\$1 for the year due to econamic instablily in the Southern African region. 3. Buttons were purchased at NS1.90. The lower pnce was a result of volume discounts granted by the supplier because Chula Chuta purchased in large quantities during the year 4. Labourers who operatod the Super Sow and 'Master Stitcher' (see note 8 below) only manufactured 50 shirts per hour during the year 5. Labourers who operated the Speed Packer manufactured according to the standard of 80 shirts per hour. 6. 0.55 metres of plastic was used for the packaging per shirt 7. On the 1at of January 2023, the Super Sew was sold at its camying amount, and a new machine named the Master Stitcher was purchased for NS5 400000 . Sull. assume a write-olf period of B years apcording to the etraight line method 8. As a result of prensure from labour unlons, the factory manager's salary was increased by N5500 per month. Additional Information: - Ignore VAT und other Tax consequences. - There was no opening or closing stock in relation to budgeted or actual figures. - Assume that the buttons have no impact on the midure between cotton and wool. \begin{tabular}{|c|c|c|} \hline \multicolumn{2}{|r|}{ REQUIRED } & MARKS \\ \hline (a) & \begin{tabular}{l} Prepare the budgeted Statement of Comprehensive Income for the year \\ ended 31 December 2023 . \end{tabular} & (10) \\ \hline (b) & \begin{tabular}{l} Calculate all possible variances. \\ NB: YOU ARE NOT REQUIRED TO CALCULATE: \\ - Efficiency and Capacity variances when calculating Fixed \\ Overhead Cost variances. \\ - Any mix and yield variances \end{tabular} & (32) \\ \hline (c) & Give possible reasons for the material and labour variances. & (6) \\ \hline (d) & Explain the difference between budgets and standard costing. & (2) \\ \hline & Show all your workings! & (50) \\ \hline \end{tabular} QUESTION 1 shirts, with buttons and a collar. Thula Chula) manufactures high-quality long sleeve work few years from sales to high-profits by he obtained a tubutantial market share in the past strategy. Chula Chula's reputation business people, because of their product premlum price of cotton and wool used in the mn for high-quelify ahirts originated from their unique mixture machine named the Super Sew watacturing of the shirts. Chuta Chula owns a revolutionary the material as weil as sews the which is used to manufacture the shirts. The machine sews another machine which sps the buttons on the shirts, to form the final product. There is also Packer, Springle's yich specially packages every shin. The machine is called the Spood Chicember. Chula Chula created the following standards for the upcoming 2023 financial year: Salea: - Market resaarch has reveraled that Chula Chuta can expect to sell 60000 shirts (also the normal annual capacity) at N$400 por shirt. Costs: 1. Material: (Each shirt needs 3 metres of material in total) - Cotton: Cotton can be purchased at NS50 per metre. - Wool: Wool is imported from sheep farmers in Australia at $8.50 per metre fan - The perfect mixture is 70% cotfon and in calculating the standard price) - Buttons: Each shirt needs 6 buttons at N\$2 per button 2. Labour: - 5 Labourers are needed to operate the Super Sew. All labourers are needed of the same time to operate the machine. These labourers are paid N525 per hour and it - 3 Labourers hour to manufacture fo shirts. hour. It takes them 1 hour to manufacture 80 shictser and they are paid N518 per 3. Variable overhead cost: - Variable overhead cost consists of plastic needed in the packaging of the shirits. Each shirt needs 0.5 metre of plastic for packaging. Plastic is purchased at N\$20 per metre, 4. Fixed overhead cost: to the straight line method. - Speed Packer's cost price is N\$3 825000 and is depreciated over 9 years according to the straight line method. - The factory manager's salary is N\$18 500 per month. - There are no other budgeted fixed overheads other than those incicated above - Fixed overheads are allocated on the basis of units produced. 5. Other non-manufacturing cost: - Consists of marketing, sales and adminisirative costs of N5500 000 and is foxed per year: year