BRIKZ $($Pty$)$ Ltd $($BRIKZ$)$ is a small and exclusive bricks manufacturing entity. BRIKZ

produces specialised building blocks, and the manufacturing process is labour

intensive. BRIKZ applies a standard absorption costing system.

The management of BRIKZ emphasised that the performance of these building blocks

needs to be well monitored in order to ensure its sustainability.

The following is an extract of the standards for June $2024$ for the production and sale

of $15000$ units of building blocks:

Standard information per building block:

Selling price R$50$ per building block

Direct materials

Sand $1\mathrm{.}6$ kg at R$8$ per kg

Cement $0\mathrm{.}4$ kg at R$3$ per kg

Direct labour $0\mathrm{.}5$ hours paid at a rate of R$20$ per hour

Variable manufacturing overheads R$5$ per direct labour

Fixed manufacturing overheads R$1\mathrm{.}50$ per building block

The accountant provided you with the following actual profit statement based on the

manufacturing and sales information for the $16500$ building blocks that were

manufactured and sold during June $2024$:

Rands

Sales $742500$

Direct materials $(202950)$

Sand $(1\mathrm{.}2$ kg at R$9$ per kg$)178200$

Cement $(0\mathrm{.}6$ kg purchased at R$2\mathrm{.}50$ per kg$)24750$

Direct labour $($R$25$ per labour hour$)(309375)$

Variable manufacturing overheads $($R$4$ per direct labour$)(49500)$

Fixed manufacturing overheads $(19800)$

Actual gross profit $160875.$

Additional Information

The following variances were identified by the accountant. You may assume that the variances are correct.

Rands Favourable$/$Adverse

Direct material variance

Price $-$ Sand $52800$ A

Price $-$ Cement $16500$ F

Usage $-$ Sand $52800$ F

Usage $-$ Cement $9900$ A

Direct labour

Rate $61875$ A

Efficiency $82500$ A

Variable overheads

Expenditure $12375$ F

Efficiency $20625$ A

Fixed manufacturing overheads

Expenditure $2700$ F

Volume $2250$ F

Discuss two $(2)$ possible causes for each variance identified by the accountant.

$(10$ x $2$ marks$)$