QUESTION 5 Answer the questions from the information provided. 5.1 Use the information provided below to calculate and comment on the following variances Direct material usage variance Direct labour rate variance Direct labour efficiency variance Variable overhead expenditure variance INFORMATION Harpic Manufacturers makes and sells a single product from Project D. The company operates a standard costing system. Details of the budgeted and actual data for 2020 are as follows: Budgeted data Standard production costs per unit: Direct material 4 kg at a cost of R5 per kg Direct labour 2 hours at a cost of R4 per hour Variable overheads 2 hours at R2 per direct labour hour Standard production 12 000 units Actual data Direct material 41 000 kg @ R5.50 per kg Direct labour 19 000 hours @ R3.75 per hour Variable overheads R39 900 Production 10 000 units 5.2 Use the information provided below to calculate the activity rates using the ABC system. INFORMATION A project of Gen Limited is involved in the manufacture of two products and the project manager is keen on applying the principles of the ABC system. Relevant information pertaining to the two products for a given period appear below: Product A Product B Output in units 240 180 The manufacturing overheads for the period are as follows: R Set-up costs - 10 080 Stores receiving 7440 Inspection/Quality control 4200 Materials handling and dispatch 9 240 The two products are similar and are usually produced in production runs of 20 units. The number of requisitions raised on the stores was 40 for each product and the number of orders executed was 42