Question $5$

The monthly budget of Steelworks, manufacturers of specialist cabinets, was prepared on the following specification:

Production and sales

Selling price

Direct materials input

Direct labour input

Variable overhead

Fixed overhead

$30000$ units

R$80$ per unit

$5kg$ per unit at a cost of $R1,20$ per $kg$

$2$ hours per unit at a rate of $R4$ per hour

R$2$ per direct labour hour

R$110000$ per month

The following actual results were recorded for the month of August:

Stock of finished goods at start of month

Sales

Production

Stock of finished goods at end of month

$8000$ units

$40000$ units

$42800$ units

$10800$ units

Actual costs incurred were:

$R$

Direct material

INTEC COLLEGE COLLEGE $-$ JULY $2022$

$267220(213776kg$ at $R1,25$ per $kg)$

$(($Cost & Management Accounting $1)$; $($FE$\_$DL$\_$CMA$1\_$NQF$)$

$($A$.$FE$\_$DL$\_$CMA$1\_$NQF$-$B$)$

Direct labour

Variable overhead

Fixed overhead

Further information

$356577$

$165243$

$115000$

$($a$)$ Throughout August the price paid for direct materials was R$1,25$ 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 R$70$ per unit throughout the month.

$($d$)$ Stocks of finished goods are valued at standard cost of production.

Required

$1\mathrm{.}1$ In tabular format show the budgeted and actual profit for August, based on the actual sales volume achieved.

$5\mathrm{.}2$ 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$).$

$(20)$