| SECTION B: MANAGEMENT ACCOUNTING |
Question 1 [24 marks] Sunrise Company uses a standard cost system for its single product in which variable overheads are applied based on direct labour hours. The following information is given: Standard costs per unit: | Raw Materials (1.5 grams x R16 per gram | R24.00 | | Direct labour (0.75 hours x R8 per hour | | R6.00 | | Variable Overhead (0.75hours x R3 per hour | | R2.25 | Actual performance for the current year: | Units Produced | 22 400 units | | Purchases of raw materials (21000 grams xR17 per gram | | R357 000 | | Raw materials used | | 33 400 grams | | Direct labour (16 750 hours x R8 per hour | | R134 000 | | Variable overhead cost incurred | | R48 575 | | | | | | | Required: Compute the following variances for raw materials, direct labour, and variable overhead, assuming that the price variance for materials is recognized at point of purchase: a. Direct materials price variance. (4) b. Direct materials quantity variance. (4) c. Labour rate variance. (4) d. Labour efficiency variance. (4) e. Variable overhead rate variance. (4) f. Variable overhead efficiency variance. (4) Question 2 [11 marks] To improve its manufacturing operation, Sentrum Ltd has negotiated a loan of R1 979 640 from the bank at a rate of 6% per annum for a five-year period. Calculate the instalment and prepare a loan amortisation table. | 
