QUESTION $2$

$2\mathrm{.}1$ Estimates in the earliest stages of project selection are usually based on information from previous projects that can be adjusted $($scaled$)$ to match the size and complexity of the current project or can be developed using standardised formulas. List and describe the cost estimation methods used to compare and select projects.

$2\mathrm{.}2$ A company that manufactures containers has a standard price of R$5$ per gram for tin manufacturing materials. Each time a company manufactures $1$ container, it expects to use $50$ g of material. After analysis, the company found that $55$ g of material was actually used to manufacture $1$ container at a cost of R$4$ per gram. The output at the end of July is $100000$ units. Determine the total direct material variance for the process and state whether the variance is favourable or unfavourable.

$2\mathrm{.}3$ The company budgeted $0\mathrm{.}20$ hours of labor at R$60$ per labor hour to produce $1$ container. During the month the company actually used $0\mathrm{.}15$ hours to produce $1$

$-4-$

container at R$60$ per labor hour. The output at the end of July is $100000$ units. Determine total direct labor variance for the process and state whether the variance is favourable or unfavourable.

$(5)$

$2\mathrm{.}4$ The company used $45000$ machine hours to manufacture the $100000$ units at a total variable overhead cost of R$630000.$ The budgeted variable manufacturing cost based on machine hours is $0\mathrm{.}40$ hours per unit at R$16$ per hour. Determine total variable overhead cost variance for the process and state whether the variance is favourable or unfavourable.

$(6)$