Application of Management Accounting Techniques (HMAC330-1)

One of Juice-World (Pty) Ltd's divisions is a small and exclusive manufacturing plant where grape juice is still made using the traditional method. This process is labour intensive, starting with harvesting the grapes from the trees by hand and ending with bottling the filtered, exceptionally high-quality grape juice named Juicy. Juicy is the pride and glory of Juice-World (Pty) Ltd and as such, the performance of this product needs to be well monitored in order to ensure its sustainability. The accountant from the Juicy division has informed you that the division applies a standard absorption costing system. He has compiled the following actual profit statement based on the manufacturing and sales information for the 28500 bottles that were manufactured and sold during March 2022. REQUIRED: Assume that the budgeted gross profit (correctly calculated) for the Juicy division for March 2022 amounted to R1 037500. Reconcile the budgeted gross profit to the actual profit. Clearly indicate all applicable variances as well as whether each variance is favourable or adverse. (25 marks) Round to two decimals where applicable