shirts, with buttons and a collar, They Chulon) menufsctures high-quality long aleeve won few years from sales to high,profiley hove ottained o substantiat muaket share in the pant strategy, Chula Chula's reputation buainets people, becaute of their product peremium price another machine which specinlly pacts on the ahirts. bo form the final product. There is also Pocker. Springle's yoer specially packinget overy shit. The machion is caled the Speed ind 31 Doctmber Chula Chuta created the followiog standards for the upcoming 2023 fonancial years Salea: - Market research has rovealed that Chula Chula can expect to neili 60000 shirs faho the normat annual capocity at Nis 400 por shirt. Costs: 1. Material: (Each shirt needs 3 metres of material in total) - Cotton Cotton can be purchased at N5 50 per metre. - Wool Wool is imported from aheep farmers in Australia at 58.50 per metre ian - The perfect mixture is 70.5 cotton and in calculating the standard price) * Butions. Each shirt needs 6 bution and 30% wool 2. Labour: - 5 Labourers are needed to operate the Super Sew. All lubourers are seeded ot the same time to operate the machine. These labourers are paid NS25 per hour and i - 3 Labocirers are necded to macture 60 shins. hour It takes them 1 hour to manufacture 80 shirtser and they are paid NS18 pet 3. Variable overhead cost: - Variable overhead cost consists of plastic needed in the packaging of the shits. Each shint needs 0.5 metre of plastic for packaging. Plastic is purchased at Niszo per metre. 4. Fixed overhead cost: - Super Sew's cost price is NS4 600 c00 and is depreciatod over 8 yearn accocding to the straight ine method. - Speed Pocker's cost price is NS3 825000 and a depreciated over 9 ynarn according to the straight line method. - The factory manager's salery is N\$ 18500 per month. - There are no other budgeted faed overhesds other than those indicated above - Fixed overheads are alocated on the basis of units produced. 5. Other non-manufacturing cost: - Consists of maketuring cost: year Actual results for the vear ended 31 December 2023 Notes: i 80000 units were sold during the your because of an aggressive marketing campaigh conducted by Chuta Chila during the year. 2. Total miterial used was 220 coo rretres for the year, masio up of - 154,000 metres of cotton was used during the yoar. - 126000 metres of Wool was used during the year. The cexchenge nate also unexpectedly incressed to NS51.50\$3i for the yoar dwe to economic instabilify in the Southern Alican revion 3. Butions were purchased at NS1. .90. The iowner pnce was a result of volume discounts granted by the suppler becaise Chula Chole perchassed in large quartities during the yoar: 4. Labourers who operated the Super Sow and Master Sthcher (Gee note is below) only manutactured 50 shits per hour during the year 5. Labouters who operated the Spend Pacior munutactured eccording to the vetand ard of 80 shirts per hour. 6. 0.55 metres of plastic was used for the packagive per shint. 7. On the 1at of January 2023 , the Siper Sew was sold at do carrying amount, and a assume a write-off period of B yeart acoonding to the straight ine method 8. As a result of pressure from labour unions, the factory managor's sabary was increated by N5500 per month. Additional Information: - Ignore VAT and other Tax consequences. - There was no opening or cloning chock in relation to budgeted or actual fyuren. - Assume that the butitons have no impast on the midure betwoen cotion and wool. \begin{tabular}{|c|c|c|} \hline \multicolumn{2}{|r|}{ REQUIRED } & MARKS \\ \hline (a) & \begin{tabular}{l} Prepare the budgeted Statement of Comprehensive Income for the year \\ ended 31 December 2023 . \end{tabular} & (10) \\ \hline (b) & \begin{tabular}{l} Calculale all possible variances. \\ NB: YOU ARE NOT REQUIRED TO CALCULATE: \\ - Efficiency and Capacity variances when calculating Fixed \\ Overhead Cost variances. \\ - Any mix and yield variances \end{tabular} & (32) \\ \hline (c) & Give possible reasons for the material and labour variances. & (6) \\ \hline (d) & Explain the difference between budgets and standard costing. & (2) \\ \hline & Show all your workings! & \\ \hline & TOTAL MARKS & (50) \\ \hline \end{tabular}