The following information for July and August were extractedfrom the costing records of Venus CC:
July August
Production and sales(units) 12 000 10 000
R R
Costs:
Directmaterial 270 000 225000
Directlabour 360000 300 000
Factoryoverhead 360000 331 500
Marketingexpenses 93 000 87 000
Administrativeexpenses 153000 144 000
At the beginning of September it was estimated that productionfor that month would be either 13 000 or 14 000 units.
REQUIRED
1. Draw up the flexible budget for September based on
13 000 and 14 000 units.
2. At the end of September the cost records revealed thatthe
Following costs/expenses were incurred in producingand selling
13 500 units:
R
Directmaterial 302 400
Directlabour 400 500
Factoryoverhead 425 250
Marketingexpenses 108 450
Administrativeexpenses 180 900
Draw up a variance analysis report for September and indicatenext to each variance whether it is favourable orunfavourable.
