MAC3701_ASSESSMENT_2_-_SEMESTER_2_OF_2024

MAC3701 ASSESSMENT 1 – SEMESTER 2 OF
2024

QUESTION 1

PART A
A – a Sales volume variance

Product Budgeted Actual Difference Standard Sales volume
Sales Sales in volume Profit variance
Volume Volume
Units Units Units R R
Deluxe 5 200 3 900 (1 300) 6 810 8 853 000 A
Elite 2 800 2 600 (200) 7 050 1 410 000 A
8 000 6 500 10 263 000 A


Actual sales volumes
Deluxe = 75% * 5 200 = 3 900
Elite = 6 500 – 3 900 = 2 600

A –b Direct material purchase price variance

Raw Standard Actual Difference Actual Direct
Material Price Price in Price Quantity material
Purchased Purchase
Price variance
R R R kgs R
Aluminium 45 48 (3) 21 500 64 500 A
Magnesium 53 55 (2) 8 500 17 000 A
8 000 6 500 81 500 A


Actual Price

Aluminium = 1 032 500 = R48 per kg
Magnesium = 467 500 = R55 per kg

, A – c Direct raw material mix variance - Deluxe

Raw Actual Actual Difference Standard Direct raw
Material Quantity in Quantity in in Quantity Price material Mix
Standard Actual variance
Proportions Proportions
kgs kgs kgs R R
Aluminium 12 000 11 850 150 45 6 750 F
Magnesium 4 000 4 150 (150) 53 7 950 A
16 000 16 000 1 200 A


Actual Quantity in Standard Proportions

Aluminium = * 16 000 = 12 000 kgs
Magnesium = * 16 000 = 4 000 kgs

A – d Direct Labour Idle Time Variance – Technical Labour

Product Standard Actual Idle Difference Standard Direct Labour
Idle Time Time in Hours Work Rate Idle Time
Variance
Hours Hours Hours R R
Deluxe 385 288.75 96,25 380.43 36 616 F
Elite 357 267.75 89.25 380.43 33 953 F
8 000 6 500 70 569 F


Standard Idle Time

Deluxe = 3 850 * 1.25 * 8% = 385
Elite = 2 550 * 1.75 * 8% = 357

Actual Idle Time

Deluxe = 3 850 * 1.25 * 6% = 288.75
Elite = 2 550 * 1.75 * 6% = 267.75

Standard Work Rate = 350 / (1 – 8%) = R380.43

A – e Production delays which may have forced employees to cut lunch and breaks in
order to meet targets.