The Total Variable Costs per frame is made up as follows:

Total Direct Material R 1 500 per frame

Total Direct Labour R 1 800 per frame

Total Other Variable Costs R 500 per frame

The Total Fixed Costs is made up as follows:

Fixed Manufacturing Overheads R 8 000 000.00

Fixed Marketing and Admin Costs R 2 750 000.00

It was expected that the company would not have any opening or closing stocks for the 2020 financial year.

The company planned to increase its selling price by 15% for the 2020 financial year.

The company is also planning to increase its Variable Marketing Expenses that is included in the Total Variable Costs from the current R 100.00 per frame paid to their salespersons to R

200.00 per frame.

It was also expected that the following increases for the 2020 financial year would occur: Direct Materials - price increase by 5%

Direct Labour - increase by R 975 000.00 plus R 200.00 per frame

Salary increase - indirect labour totalling R 80 000.00

Salary increase - sales manager totalling R 25 000.00

The company's actual contribution income statement for the 2020 financial year reflected the following figures based on an actual sales level of 7 000 bicycle frames:

SALES REVENUE R78 750 000

LESS TOTAL VARIABLE COST R27 100 000

CONTRIBUTION MARGIN R51 650 000

LESS TOTAL FIXED COSTS R11 750 000

NET PROFIT R39 900 000

REQUIRED budget reconciliation in which the variances are reflected based on the actual contribution income statement for 2020 and a Flexible Budgeted contribution income statement for 2020 based on an activity level of 7 000 bicycle frames