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QUESTION 2 (10 Marks) 2.1 REQUIRED Use the information provided below to prepare the performance report for Lonmin Limited. INFORMATION Lonmin Ltd manufactures a single

QUESTION 2 (10 Marks) 2.1 REQUIRED Use the information provided below to prepare the performance report for Lonmin Limited. INFORMATION Lonmin Ltd manufactures a single product. It originally planned to produce and sell 18 000 units during the year but the actual activity level was 22 000 units.

The budgeted and actual income and cost for the year are as follows:

Original budgets Actual Results
Volume 18 000 units 22 000 units
R R
SALES 2 520 000 3 300 000
COST OF SALES (1670 000 ) (2 132 000)
DIRECT MATERIALS 720 000 924 000
DIRECT LABOUR 450 000 594 000
VARIABLE OVERHEADS 180 000 264 000
FIXED OVERGEADS 320 000 350 000
GROSS PROFIT 850 000 1168 000

END OF PAPERT

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