please answer questions 1-4

Question 1 (25 Marks) The following information for July and August were extracted from the costing records of Venus CC: July August Production and sales (units) 12 000 10 000 R R Costs: Direct material 270 000 225 000 Direct labour 360 000 300 000 Factory overhead 360 000 331 500 Marketing expenses 93 000 87 000 Administrative expenses 153 000 144 000 At the beginning of September, it was estimated that production for that month would be either 13 000 or 14 000 units. REQUIRED 1. Draw up the flexible budget for September based on 13 000 and 14 000 units. (15) 2. At the end of September the cost records revealed that the following costs/expenses were incurred in producing and selling 13 500 units: R Direct material 302 400 Direct labour 400 500 Factory overhead 425 250 Marketing expenses 108 450 Administrative expenses 180 900 Draw up a variance analysis report for September and indicate next to each variance whether it is favourable or unfavourable. (10) Question 2 (25 Marks) The following budgeted figures have been taken from the cost records of Ace Ltd Production units 9000 12 000 Capacity level 75% 100% R R Sales 1 035 000 1380 000 Direct material (@ R5 per kg) 180 000 240 000 Direct labour (@R20 per hour) 225 000 300 000 Factory overheads 300 000 330 000 Selling and administrative expenses 180 000 192 000 Normal capacity is equal to 12 000 units. As a result of the poor economic conditions the budget for February 2015 has been set at 80% of normal capacity. The company uses the absorption costing method for internal reporting purposes. The following variance report for February 2015 has been presented to management of the production department: Variance Fixed Actual Budget Results 10 000 000 10.000.000 Production units Sales units Sales 150 000 1 056 2003 200(a) Material 200 000 188 100 11 900 Direct labour 230 235 230 13 750D Factory overhead 300 000 310600 10600 ( Selling and administrative expenses 180 000 200 200 28 300 Net profit 220 000 113 550 106450 Required: a) Discuss how a flexible budget can be used when exercising cost control. (5) b) Critically discuss the format and content of the variance report for February 2015 as presented to the department Prepare an alternative variance report for the department that would be more meaningful to management Question 3 (25 Marks) The following information is applicable to Shine Wholesalers: Budgeted sales July R105 000 August R132 000 September R165 000 Cash sales amount to 20% of total sales. 55% of credit sales are collected in the month of sale, with a discount of 10% those debtors who pay during this time. The remaining outstanding credit sales are collected in cqual instalments over next two months. In October, the sales are expected to increase by 20% when compared to September. There are no bad debts. Purchases of raw materials and sales in October will be at the same ratio as in September. Shine Wholesalers is allowed two month's credit on purchases of raw materials. 40% of purchases are paid in the month following purchase and the rest in the second month after purchase. Purchases of raw materials are expected to as follows: June R55 000 July R68 000 August R85 000 September R10S 000 Wages and salaries are paid to employees at the end of the month in which they were camed. Salaries and wages are expected to be: June R22 200 R20 500 August R23 500 September R26 500 October R28 000 Rent amounts to R48 000 per annum. All other overheads amount to R38 160 per annum, which includes RI 875 depreciation on equipment, bought on 1 July 20x20 for R75 000. This amount is expected to be paid off in three equal monthly instalments, commencing on 1 August 20x20. Rental expenses and overheads expenses are expected to accrue evenly throughout the financial year. Overdraft facilities are available. The opening bank balance on 1 September 20x20 amounted to R16 800 (favourable). Required: Prepare a columnar cash budget for September and October 20x20. Show all calculations. Round off to the nearest rand. July Question 4 Marks) (25 Quail Limited is a retail distributor for computer hardware, related software and support services. The management accountant has prepared sales budgets for the first semester of 20x20. These are presented below: Month Total Sales January R550 000 February R500 000 March R480 000 April R400 000 May R425 000 June R600 000 Cash sales amount to 25% of the total sales. Collections of the credit sales are as follows: 40% in the month of sale and it is subject to a 4% discount 30% one month after the month of sale 28% two months after the month of sale 2% in uncollectable Quail Limited's inventory requirements are equal to 30% of the next month's sales. The purchasers' terms of payment require a down payment of 45% and the balance is payable 30 days thereafter. July's total sales are expected to be R620 000. Quail Limited had a bank overdraft of R150 000 on 1 May 20x20. Required: Prepare a cash budget for Quail Limited by month for May and June 20x20. Show all your calculations