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Sycamore (Pty) Ltd ("Sycamore") is a manufacturer of financial calculators under the brand All- Finance. Sycamore uses the direct costing system and has a 28 February financial year-end. There has been an unexpected increase in demand for Sycamore's All-finance financial calculators. The company uses standard costing variance analysis to evaluate the performance of their managers. The All-Financial calculators are made from frames (body and parts) which are sourced from another financial calculator manufacturer, Balsam (Pty) Ltd. Sycamore then converts the frames into calculators according to their specifications and thereafter add their logo. The company budgeted to manufacture and sell 4 500 All-Financial calculators at a selling price of R2 500 each during the month of February 2022 Sycamore held an executive directors' meeting on 28 February 2022. The meeting was held in the spacious new boardroom. The following are the extracts from the minutes of the meeting: The following discussed are the extracts from both the standard and actual results for the month ended 28 February 2022 Details Notes Total Standard Actual Per unit 0,15 kg R200 per 0,25 kg R225 per kg kg 2 & 3 Direct material (frames) 5 1 hour R175 per 1,5 hours R175 per hour hour Direct labour Actual sales Units sold R29 150 000 5 300 4 Notes: 1. There were no budgeted and actual opening- or closing inventory of any type for February 2022 2. Mr. Mokotla, Chief Financial Officer (CFO), solely approved the contract with Hornbeam (Pty) Ltd that they supply Sycamore with the direct materials from 01 April 2022. The contract was concluded at an overstated price. Mr. Mokotla's son is the Chief Executive Officer (CEO) of Hornbeam (Pty) Ltd. 3. All the frames purchased were issued to production to manufacture the 5 300 All-Financial calculators. There were no losses in the manufacturing process 4. The Chief Operating Officer (COO) instructed that a fraction function be installed in the All- Financial calculators even though the permission of the relevant party has not been obtained. The installations were subsequently made on all the All-Financial calculators. The fraction function has been registered by the owners and the use thereof without proper agreement is unlawful. 10 MAC2601/102/2022 5. The company's COO on behalf of the management instructed the technicians to also pull customers' personal information from the system and sell it to marketing companies. The information was pulled and sold as instructed. The company did not send any request for customers' consent. REQUIRED Prepare a memorandum to management in which you: Marks (1) 1. Calculate the following variances: (a) Material quantity variance (b) Material purchase price variance (c) Labour efficiency variance (d) Selling price variance. Note: Only round your final answer to the nearest whole number. (4%) (47) (47) (4/2) (6) 2. List and briefly discuss three ethical and/or statutory concerns for the attention of Sycamore management. Present you response in a table format as shown below: List ("What") Discuss ("Why" Sycamore (Pty) Ltd ("Sycamore") is a manufacturer of financial calculators under the brand All- Finance. Sycamore uses the direct costing system and has a 28 February financial year-end. There has been an unexpected increase in demand for Sycamore's All-finance financial calculators. The company uses standard costing variance analysis to evaluate the performance of their managers. The All-Financial calculators are made from frames (body and parts) which are sourced from another financial calculator manufacturer, Balsam (Pty) Ltd. Sycamore then converts the frames into calculators according to their specifications and thereafter add their logo. The company budgeted to manufacture and sell 4 500 All-Financial calculators at a selling price of R2 500 each during the month of February 2022 Sycamore held an executive directors' meeting on 28 February 2022. The meeting was held in the spacious new boardroom. The following are the extracts from the minutes of the meeting: The following discussed are the extracts from both the standard and actual results for the month ended 28 February 2022 Details Notes Total Standard Actual Per unit 0,15 kg R200 per 0,25 kg R225 per kg kg 2 & 3 Direct material (frames) 5 1 hour R175 per 1,5 hours R175 per hour hour Direct labour Actual sales Units sold R29 150 000 5 300 4 Notes: 1. There were no budgeted and actual opening- or closing inventory of any type for February 2022 2. Mr. Mokotla, Chief Financial Officer (CFO), solely approved the contract with Hornbeam (Pty) Ltd that they supply Sycamore with the direct materials from 01 April 2022. The contract was concluded at an overstated price. Mr. Mokotla's son is the Chief Executive Officer (CEO) of Hornbeam (Pty) Ltd. 3. All the frames purchased were issued to production to manufacture the 5 300 All-Financial calculators. There were no losses in the manufacturing process 4. The Chief Operating Officer (COO) instructed that a fraction function be installed in the All- Financial calculators even though the permission of the relevant party has not been obtained. The installations were subsequently made on all the All-Financial calculators. The fraction function has been registered by the owners and the use thereof without proper agreement is unlawful. 10 MAC2601/102/2022 5. The company's COO on behalf of the management instructed the technicians to also pull customers' personal information from the system and sell it to marketing companies. The information was pulled and sold as instructed. The company did not send any request for customers' consent. REQUIRED Prepare a memorandum to management in which you: Marks (1) 1. Calculate the following variances: (a) Material quantity variance (b) Material purchase price variance (c) Labour efficiency variance (d) Selling price variance. Note: Only round your final answer to the nearest whole number. (4%) (47) (47) (4/2) (6) 2. List and briefly discuss three ethical and/or statutory concerns for the attention of Sycamore management. Present you response in a table format as shown below: List ("What") Discuss ("Why