Question $1$

$[24$ marks$]$

Sunrise Company uses a standard cost system for its single product in which variable overheads

are applied based on direct labour hours. The following information is given:

Standard costs per unit:

Actual performance for the current year:

Required:

Compute the following variances for raw materials, direct labour, and variable overhead,

assuming that the price variance for materials is recognized at point of purchase:

a$.$ Direct materials price variance.

b$.$ Direct materials quantity variance.

c$.$ Labour rate variance.

d$.$ Labour efficiency variance.

e$.$ Variable overhead rate variance.

f$.$ Variable overhead efficiency variance.SECTION B: MANAGEMENT ACCOUNTING Question $1[24$ marks$]$ Sunrise Company uses a standard cost system for its single product in which variable overheads are applied based on direct labour hours. The following information is given: Standard costs per unit: Raw Materials $(1\mathrm{.}5$ grams x R$16$ per gram R$24\mathrm{.}00$ Direct labour $(0\mathrm{.}75$ hours x R$8$ per hour R$6\mathrm{.}00$ Variable Overhead $(0\mathrm{.}75$hours x R$3$ per hour R$2\mathrm{.}25$ Actual performance for the current year: Units Produced $22400$ units Purchases of raw materials $(21000$ grams xR$17$ per gram R$357000$ Raw materials used $33400$ grams Direct labour $(16750$ hours x R$8$ per hour R$134000$ Variable overhead cost incurred R$48575$ Required: Compute the following variances for raw materials, direct labour, and variable overhead, assuming that the price variance for materials is recognized at point of purchase: a$.$ Direct materials price variance. $(4)$ b$.$ Direct materials quantity variance. $(4)$ c$.$ Labour rate variance. $(4)$ d$.$ Labour efficiency variance. $(4)$ e$.$ Variable overhead rate variance. $(4)$ f$.$ Variable overhead efficiency variance. $(4)$ Question $2[11$ marks$]$ To improve its manufacturing operation, Sentrum Ltd has negotiated a loan of R$1979640$ from the bank at a rate of $6\%$ per annum for a five$-$year period. Calculate the instalment and prepare a loan amortisation table.