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Question 2 The Bartlesville plant of Harmon Company produces an industrial chemical. At the beginning of the year, the Bartlesville plant had the following standard cost sheet: Direct materials (10 kg @ R1.60 per kg) R16.00 Direct labour (0.75 hour @ R18 per hour) R13.50 Variable overhead 10.75 hour @ R3 per hour R2.25 Fixed overhead R3.00 10.75 hour @ R4 per hour) Standard cost per unit R34.75 The Bartlesville plant calculates its overhead rates using practical volume, which is 72 000 units. The actual results for the year are as follows: Units produced 70 000 Direct materials purchased 744 000 kg R1.50 per kg Direct materials used 736 000 kg Direct labour 56 000 hours @ R17.90 per hour Variable overhead R175 400 Fixed overhead R214 000 Required: Calculate the following: 1. Direct materials price and usage variances Direct labour rate and efficiency variances Variable overhead spending and efficiency variances iv. Fixed overhead spending and volume variances b. Prepare journal entries for the following: i. The purchase of direct materials ii. The issuance of direct materials to production il. The addition of direct labour to production iv. The addition of overheads to production The incurrence of actual overhead costs vi. Closing off of variances to Cost of Goods Sold