2.2 REQUIRED Study the information given below that can be used to prepare the budgets of Product Chip and Product Nik for October 2018 and answer question 11-15. INFORMATION Chipnik Limited manufactures and sells two products, viz. Chip and Nik. The following information is available to determine the budget requirements for October 2018: 1. Projected sales for October and November 2018: October November 15 000 units of Chip at R60 each 12 000 units of Chip at R44 each 5 000 units of Nik at R120 each 4 000 units of Nik at R84 each 2. 3. The policy of Chipnik Limited is to maintain a closing inventory equal to 20% of the budgeted sales of the following month. Direct labour hours required to produce one unit of each product and the rate per hour are as follows: Chip: 1 hour at R12 per hour Nik: 2 hours at R15 per hour. 2.2.1 Prepare a production budget 2.2.2 Prepare a direct labour budget 2.3 Use the information provided below to answer question 16-20 based on variance analysis. INFORMATION The following figures were extracted from the budgeted statement of comprehensive income of Simplex Limited for August 2017, a normal production month in which 20 000 units are expected to be produced: Materials: R Sim (10 000 metres at R6 per metre) 60 000 Plex (10 000 metres at R14 per metre) 140 000 Direct labour Fixed overheads (10 000 hours at R80 per hour) 800 000 400 000 The actual production for August 2017 was 24 000 units and the following is an extract of the statement of comprehensive income: Materials: Sim (16 000 metres at R4 per metre) Plex (10 000 metres at R16 per metre) Direct labour (12 500 hours at R86.20 per hour) Fixed overheads 1. 2.3.1 What is the material mix variance? 2.3.2 What is the material yield variance? 2.3.3 What is the material quantity variance? 2.3.4 2.3.5 What is the fixed manufacturing overheads volume capacity variance? What is the fixed manufacturing overheads volume efficiency variance? R 64 000 160 000 1 077 500 0