question archive QUESTION 2: ENZER LIMITED 15 marks] Enzer Ltd budgeted to manufacture and sell drums of a purifying agent during October 2021
QUESTION 2: ENZER LIMITED 15 marks] Enzer Ltd budgeted to manufacture and sell drums of a purifying agent during October 2021
Subject:AccountingPrice: Bought3
QUESTION 2: ENZER LIMITED 15 marks] Enzer Ltd budgeted to manufacture and sell drums of a purifying agent during October 2021. The standard cost per drum manufactured is as follows: Direct material: Enger 8 litres@R2 per litre R16.00 Direct labour 1hour @R5 per hour R5.00 Variable overheads 1 hour @ R2.50 per hour R2.50 Fixed overheads 1 hour @ R3.50 per hour R3.50 Total R27.00 During October 2021, 80 000 drums of purifying agent were manufactured and sold. Actual costs incurred during this period were as follows: • Enger: 700 000 litres were purchased and used at a cost of R1 330 000 • Direct labour: 82 000 direct labour hours worked at a total cost of R414 100. • Manufacturing overheads: R575 200 (R362 000 of this amount was fixed). Required: Calculate the following variances: i Direct material price and quantity variances. (2) ii. Direct labour rate and efficiency variances. (2) iii. Variable rate and efficiency variances. (1) Note: Use labels to clearly indicate whether your answer is favourable (F) or unfavourable (U). Round off cost per unit to 2 decimal places and total costs to the nearest R1. All unfavourable variances must be preceded by a minus sign. Failure to adhere to these instructions will result in you forfeiting the mark for that answer.
