Question 5 The monthly budget of Steelworks, manufacturers of specialist cabinets, was prepared on the following specification: Production and sales 30 000 units Selling price R80 per unit Direct materials input 5 kg per unit at a cost of R1,20 per kg Direct labour input 2 hours per unit at a rate of R4 per hour Variable overhead R2 per direct labour hour Fixed overhead R110 000 per month The following actual results were recorded for the month of August: Stock of finished goods at start of month 8 000 units Sales 40 000 units Production 42 800 units Stock of finished goods at end of month 10 800 units Actual costs incurred were: R Direct material 267 220 (213 776 kg at R1,25 per kg) Direct labour 356 577 Variable overhead 165 243 Fixed overhead 115 000 Further information (a) Throughout August the price paid for direct materials was R1,25 per kg. Direct material is used as soon as it arrives on site. No stocks of material were held at the start or end of August. (b) The labour rate paid throughout the month was R4,10 per hour. (c) The selling price of finished goods was R70 per unit throughout the month. (d) Stocks of finished goods are valued at standard cost of production. Required 5.1 In tabular format show the budgeted and actual profit for August, based on the actual sales volume achieved. 5.2 Calculate all the variable cost variances for the month of August (variances must be subdivided e.g. material must have the total variance, the price variance and the usage variance). (20)