QUESTION 5 (20 MARKS) 5.1 REQUIRED Use the information provided below to calculate the following variances. In each case state whether the variance is favourable or unfavourable. 5.1.1 Materials purchase price variance (3 marks) 5.1.2 Materials quantity variance (3 marks) 5.1.3 Labour rate variance (3 marks) 5.1.4 Labour efficiency variance. (3 marks) INFORMATION Standards: The normal monthly production of Reval Manufacturers is 3 500 units. The following standards were set for one unit of product Kip: Raw materials: 3 kilograms of Material B at a price of R6 per kilogram. Direct labour: 6 labour hours at a rate of R9 per hour. Actual information for May 2019: 9 600 kg of Material B was purchased for R60 480. 3 000 units of product Kip were produced using 8 700 kg of Material B. The wage records showed that it took 18 600 hours at a cost of R158 100 to produce the 3 000 units of product Kip. 5.2 REQUIRED Use the information provided below to calculate the following overheads variances. In each case state whether the variance is favourable or unfavourable. 5.2.1 Variable overheads efficiency variance (2 marks) 5.2.2 Variable overheads expenditure variance (2 marks) 5.2.3 Fixed overheads volume variance. (4 marks) INFORMATION Continental Manufacturers manufactures Product J. It provided the following information for May 2019: Budgeted figures: Variable manufacturing overheads Fixed manufacturing overheads Labour hours Expected production R60 000 R144 000 12 000 hours 3 000 units Actual results: Variable manufacturing overheads Fixed manufacturing overheads Labour hours worked Actual production R57 405 R149 640 12 900 hours 3 150 units