PR 3

Use these figures, provided by Dandenong Manufacturing for its factory overhead for the month of April, to answer the questions 5.1 - 5.3 below:

. Budget Actual .

$ $

Indirect materials 75 600 95 760

Indirect labour 144 000 144 720

Maintenance 32 400 9 720

Electricity 10 350 10800

Insurance 9 720 9 660

Lease of building 16 800 17250

Depreciation of plant 19 080 19 080

. .

PR 3.1

Prepare 'Performance report for April showing the percentages of variances from budget'

. Budget Actual Variance Variance % .

$ $

. Indirect materials .

. Indirect labour .

. Maintenance .

. Electricity .

. Insurance .

. Lease of building .

. Depreciation of plant .

. Totals .

PR 3.2

Dandenong Manufacturing's policy is to investigate all variances that deviate + or - 5% from budget.

Which variances should be investigated?

PR 3.3

Suggest briefly for each strategy two (2) possible causes for each of the variances to be investigated