Answer ALL three (3) questions on the exam paper Q1. Boozy-Bob Ltd manufactures a single product - barrels of moonshine. The company operates a standard absorption costing system and absorb overheads based on direct labour hours. The standard selling price and standard costs for each barrel are as follows: Per barrel Selling price 300 Direct material (15 litres @ 9 per litre) 135 Direct labour (5 hours @ 12 per hour) 60 30 Variable production overheads (5 hours @ 6 per hour) Fixed production overheads (5 hours @ 3 per hour) Gross profit 15 60 The budgeted production and sales for the month were 1,000 barrels. The fixed overhead absorption rate has been calculated based on budgeted production for the month Actual results for the month were: Production 1,400 barrels 1,200 barrels Sales Selling price 306 Direct Materials Direct Labour 22,000 litres at 12 per litre 6,800 hours at 15 per hour 33,000 Variable production overheads Fixed production overheads 18,000 No inventories were held by Boozy-Bob. Required: a) Given the information above calculate the budgeted profit and the actual profit for the month. [6 marks] b) Prepare a statement reconciling the budgeted profit with the actual profit for the month. Your statement should show the variances in as much detail as possible. [11 marks]