Tr de an Th exi sol Thu hov The 1.9 1.10 Budgeted income statement (ignore income taxes) Cash budget Question 2 The plant of Oh So Heavenly Company produces a moisturizing lotion. At the beginning of the year the plant had the following standard cost sheet: Direct materials (10 kg @ R16) Direct labour (0.75 hours @ R180) Fixed overhead (0.75 hours @R40) Variable overhead (0.75 hours @R30) Total R160 R135 R30 R22.50 R347.50 The plant calculates its overhead rates using practical volume, which is 72 000 units. The actual results for the year are as follows: a. Units produced 70 000 b. Direct materials 744 000 kg @ R15 per kg purchased C. Direct materials used 736 000 kg d. Direct labour 56 000 hours @ R179 per hour e. Fixed overhead R2 140 000 f. Variable overhead R1 754 000 Required: Calculate the following: 2.1 2.2 Calculate the direct materials price and usage variances. Calculate the direct labour rate and efficiency variances. 2.3 Calculate the fixed overhead spending and volume variances. Interpret the volume variance. 2.4 Calculate the variable overhead spending and efficiency variances. ST Assignment 1 Marks: 100 Prepare journal entries for the following: 2.5 a. b. C. d. e. f. Question 3 The purchase of direct materials The issuance of direct materials to production The addition of labour to Work in Process The addition of overhead to Work in Process The incurrence of actual overhead costs Closing off of variances to Cost of Goods Sold Lindin Inc, produces key ingredient for liquid laundry detergents. T and B, are mixed and heated to produce a cleansing chemical that i produce the liquid detergents. The cleansing ingredient is produced following standards: