Question 2 Liwewe Ltd makes two products, BUDU and DUBU. The following data are relevant for the year ending 31st December 2023: a. Material prices: Material A GHS5 per unit; Material B GHS6 per unit b. Direct labour is paid GHS9 per hour. c. Each unit of finished product requires: Material A: BUDU 9 units DUBU 10 units Material B: BUDU 7units DUBU 8units Direct labour Budu 7 hours Please Dubu 6hours d. Forecast sales for the year 2023 are: BUDU - 14,500 units @ GHS210 each DUBU - 9,500 units @ GHS360 each e. It is estimated that there will be opening stock of 800 units of BUDU and 500 units of DUBU. f. At the end of the year 2023, the company intends holding inventory of 750 units and 900 units of BUDU and DUBU respectively. g. The Production Director estimates that the opening stock of raw materials will be 3,200 units of material A and 4,500 units of material B. h. At the end of the year 2023, the inventories of these raw materials are to be: Material A 4,500 units; Material B 2,500 units

Required: functional budgets for the year ending 31st December 2023.

Question 2 Aduana Ltd produces and sell a special product called DAWADAWA. The standard cost of the product is as follows: GH Direct Material (3kg @ GH10) =30 Direct Labour (2hrs @ GH15) =30 Variable Overhead (2hrs @ GH5) =10 Fixed Overhead (2hrs @ GH6) =12 Total Unit cost 82

Additional information: Projected production and sales units are 5,000 and 4,500 respectively. The standard selling price is GH120.

Actual performance is presented as follows: Production units 4,500 Sales @ GH125 GH4,300 Bought and used 11,250kg of Direct material GH106,875 9,000 Direct labour hours GH 126,000 Variable overheads GH 49,500 Fixed Overhead GH60,000

Required: i) Material Price Variance ii) Material Usage Variance iii) Total material variance iv) Labour Rate Variance v) Labour Efficiency Variance vi) Total labour variance vii) Variable overhead expenditure variance viii) Variable overhead efficiency variance ix) Sales price variance x) Sales volume variance