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QUESTION 3 - 30 Marks (36 Minutes) THIS QUESTION CONSISTS OF TWO (2) PARTS. PART A - 22 Marks (26 Minutes) Heta (Pty) Ltd ("Heta") is based in the Hazyview industrial area along the R40 road to the Kruger Gate of the Kruger National Park. This area is a popular stopover point for those who travel to or from the Kruger National Park; however, in addition to selling from its production site, Heta also supplies its products to curio shops all over South Africa. One of the products manufactured by Heta that are popular with tourists is the little-five species cellphone pouches ("pouches"), which can easily fit to most smart phones. 18 480 R86 The pouches are made from silicone. The company has budgeted to sell 60 000 pouches for R4 800 000 in September 2020. The following information regarding the manufacturing of pouches is an extract from the management accountant's report for the month of September 2020: Extract from the actual results for September 2020: Total number of silicone cups purchased (at a cost price of R76 per cup) Total direct labour cost for all pouches manufactured (at 0,28 direct R784 000 labour hours per pouch) Selling price per pouch Variable manufacturing overhead rate per pouch R7,50 Fixed manufacturing overheads (actual) R700 000 Standard direct manufacturing costs per pouch for September 2020: Silicone (measured in "cups", with a cost price of R78 per cup) 27,30 Direct labour at 15 minutes per pouch 11,25 Variable manufacturing overheads (varies with units produced) 8,00 Total standard direct manufacturing costs per cellphone pouch R46,55 Additional information for September 2020: 1. The actual number of pouches manufactured and sold during September 2020 were 56 000 units. Actual sales for the month amounted to R4 816 000. 2. No opening or closing inventory of any inventory type is kept. 3. The company uses a direct costing system; however, if absorption costing was applied, the predetermined fixed manufacturing overhead rate would be R48 per direct labour hour. R QUESTION 3 - PART A (continued) REQUIRED Marks Calculate the following for the month ended 30 September 2020: (a) Material purchase price variance, (b) Material quantity variance. Total material variance (d) Direct labour rate variance. (e) Variable manufacturing overheads rate variance. (0) Variable manufacturing overheads efficiency variance. (g) Selling price variance. th) Fixed manufacturing overhead expenditure variance. TOTAL PART A (2x) (3x) (2) (34) (2x) (1) (34) (3x) 22

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