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R600 000 QUESTION 1: SMALL-BAG LIMITED [15 MARKS] The following data has been extracted from the books of Small-Bag Ltd. The company's management accountant has been struggling with classification of the production and non-production costs: 20 000 units 30 000 units Direct material cost R300 000 R450 000 Direct labour cost R900 000 Indirect material cost R15 600 Supervisor's salaries R32 000 R32 000 Insurance R5 600 R8 100 Water and electricity R15 000 R20 000 Depreciation R23 000 R12 000 Selling and administrative costs R5 000 R7 500 Repairs and maintenance cost R30 000 R37 500 R15 600 R23 000 R12 000 Rent Actual data at the end of the month for 35 000 units was as follows: : Direct material cost Direct labour cost Indirect material cost Supervisor's salaries Insurance Water and electricity Depreciation Rent Selling and administrative costs Repairs and maintenance cost 35 000 units R535 000 R1 045 000 R15 750 R32 000 cre R9 650 R21 950 R23 500 R11 500 R8 500 R41 250 - Required: Prepare a flexible budget at 35 000 units. Use the high-low method to separate the mixed costs. Use labels to clearly indicate whether your answer is favourable (F) or unfavourable (U). If there is no variance, your answer should be zero (O) and the label should be 'NONE'. Where applicable, round off the variable cost per unit to TWO decimal places. All unfavourable variances must be preceded by a minus sign e.g. -32000. Failure to adhere to these instructions will result in you forfeiting the mark for that answer. Note: QUESTION 2: ENZER LIMITED 2: 15 marks] Enzer Ltd budgeted to manufacture and sell drums of a purifying agent during October 2021. The standard cost per drum manufactured is as follows: Direct material: Enger Direct labour Variable overheads Fixed overheads Total 8 litres@R2 per litre 1hour @R5 per hour 1 hour @ R2.50 per hour 1 hour @ R3.50 per hour R16.00 R5.00 R2.50 R3.50 R27.00 During October 2021, 80 000 drums of purifying agent were manufactured and sold. Actual costs incurred during this period were as follows: : Enger: 700 000 litres were purchased and used at a cost of R1 330 000. Direct labour: 82 000 direct labour hours worked at a total cost of R414 100. Manufacturing overheads: R575 200 (R362 000 of this amount was fixed). . . Required: Calculate the following variances