REQUIRED Use the information provided below to prepare the following for March 2020: 2.1. Flexible budget for two different activity levels i.e. 18 000 and 25 000 units(9)

2.2. Performance report(11)

2.3. Comment on the following variances:

2.3.1. Sales(1)

2.3.2. Direct Material(2)

2.3.3. Fixed overheads(2)

INFORMATION Widget Ltd manufactures a single product. It originally planned to produce and sell 12 000 units during the year but the actual activity level was 14 000 units. The budgeted and actual income and cost for the year are as follows:

Original Budget Actual results

Volume 12 000 units 14 000 units

R R

Sales 1 440 000 1 820 000

Cost of sales (1 238 400) (1 620 000)

Direct Materials 600 000 784 000

Direct labour 420 000 546 000

Variable overheads 144 000 126 000

Fixed overheads 74 400 164 000

Gross Profit 201 600 200 000

2.4 Mancosa students make cash payments for student fees on the 1st floor in Durban. Discuss how effective segregation of duties can be implemented relating to this cash if there are three staff employed in the finance office.(5)