QUESTION ONE [20 MARKS]

(1)Successful organisations have employed as one of their strategies the Overall Cost Leadership Strategy. As a recent graduate of the Master of Commerce in Professional Accounting and Corporate Governance/ Grad CGI, you have been requested to present a lecture to undergraduate students on Overall Cost Leadership Strategy.

Giving relevant Zimbabwean examples, explain the following to the students:

1. Advantages of Overall Cost Leadership.
2. How to achieve Overall Cost Leadership.
3. Risks inherent in Overall Cost Leadership

(12 marks)

(2)Chaminuka Limited operate a Standard Costing and Budgetary Control System in their factory with provision for monthly analysis of variances. Following are the figures relative to the month of November, 2021.

1. Budgeted Capacity - 50 000 hours to produce 10 000 units
2. Budgeted Overheads - fixed $100 000, variable $25 000
3. Actual capacity worked - 40 000 hours
4. Actual production achieved - 6 400 units
5. Actual overheads incurred - fixed $104 000, variable $18 000

Required:Detailed analysis of overhead variances for the month of November 2021.

(8 marks)