Question 21

The following information is available for ABC Manufacturing:

Standards:

Direct materials (2m @ R5) R10

Direct labour (0.5h @ R10p/h) R5

Actual results for the year

Production 6000 units

Direct materials (11750m purchased and used) R61 100

Direct labour (2 900 hours) R29 580

Management allows a 5% variance from standards

Spending variable overhead variance is the?

Select one and motivate answer

a. Difference between the actual variable overhead rate and the standard variable overhead rate

b. All of the options are correct

c. Actual price of the product and the standard price of the product

d. Spending overhead and the efficiency overhead

Question 22

The following information is available for ABC Manufacturing:

Standards:

Direct materials (2m @ R5) R10

Direct labour (0.5h @ R10p/h) R5

Actual results for the year

Production 6000 units

Direct materials (11750m purchased and used) R61 100

Direct labour (2 900 hours) R29 580

Management allows a 5% variance from standards

The price variance for direct materials per unit is?

Select one and motivate answer

a. R5.00

b. None of the options is correct

c. R0.20

d. R5.20

Question 23

The following information is available for ABC Manufacturing:

Standards:

Direct materials (2m @ R5) R10

Direct labour (0.5h @ R10p/h) R5

Actual results for the year

Production 6000 units

Direct materials (11750m purchased and used) R61 100

Direct labour (2 900 hours) R29 580

Management allows a 5% variance from standards

Fixed overhead volume variance is the?

Select one and motivate answer

a. The difference between the actual volume and the budgeted volume

b. The difference between the budgeted volume and the applied volume

c. The difference between the volume of fixed costs as the unit production increases

d. The difference between the volume of production and the volume planned to produce

Question 24

The following information is available for ABC Manufacturings first quarter:

Unit sales 100 000

Unit price R20

Units in beginning inventory 7000

Units required in end inventory 13000

Beginning inventory of wire 500m

Required end inventory of wire 1500m

ABC Manufacturing produces wire hangers which are painted. Each hanger requires 1.5m of wire at R2.20 a meter. Each hanger takes 15 minutes to bend and labour is charged at R45 per hour.

Direct labour budget amount for the first quarter of ABC Manufacturing is?

Select one and motivate answer

a. R1 125 000

b. R4 770 000

c. R1 192 500

d. R1 203 750

Question 25

The following information is available for ABC Manufacturings first quarter:

Unit sales 100 000

Unit price R20

Units in beginning inventory 7000

Units required in end inventory 13000

Beginning inventory of wire 500m

Required end inventory of wire 1500m

ABC Manufacturing produces wire hangers which are painted. Each hanger requires 1.5m of wire at R2.20 a meter. Each hanger takes 15 minutes to bend and labour is charged at R45 per hour.

Total purchase cost is?

Select one and motivate answer

a. R354 860

b. R352 000

c. R330 000

d. R28 600