Contents
1. Prepare a statement in columnar form to show the following information................ 4
a) Original budget for quarter 1 (based on manufacture of 1,000 units).............................4
b) Actual costs for quarter 1................................................................................................ 4
c) Variances between budget and actual costs for quarter 1............................................... 4
d) Flexed budget for quarter 2 (based on manufacture of 900 units).................................. 5
e) Actual costs for quarter 2................................................................................................ 5
f) Variances between budget and actual costs for quarter 2............................................... 5
2. Identify two of the significant variances, and.................................................................6
a) Suggest possible reasons for them.................................................................................. 6
b) Propose two suitable corrective actions, justifying your choice of these particular
actions.....................................................................................................................................7
c) Evaluate the costs and benefits of these two possible corrective actions........................8
References............................................................................................................................... 11
, 1. Prepare a statement in columnar form to show the following
information.
a) Original budget for quarter 1 (based on manufacture of 1,000 units)
b) Actual costs for quarter 1
c) Variances between budget and actual costs for quarter 1
Burnside Limited
Original Budget for Quarter 1
Budget (1,000 Units) Actual (1,000 Units)
Description Variance (£)
(£) (£)
Income (1,000*200) 200,000 200,000 0
Materials (1,000*70) 70,000 70,000 0
Labour (1,000*50) 50,000 50,000 0
Electricity for production
5,000 8,000 (5,000-8,000) = -3,000 U
(1,000*5)
Standing charge for
10,000 12,000 (10,000-12,000= -2,000 U
electricity
Depreciation 10,000 10,000 0
Rent and rates 15,000 15,000 0
Administration costs 10,000 10,000 0
Total cost 170,000 175,000 (170,000-175,000) = -5,000 U
Actual – Budget
Profit 30,000 25,000
25,000 - 30,000 = 5,000 U
2
1. Prepare a statement in columnar form to show the following information................ 4
a) Original budget for quarter 1 (based on manufacture of 1,000 units).............................4
b) Actual costs for quarter 1................................................................................................ 4
c) Variances between budget and actual costs for quarter 1............................................... 4
d) Flexed budget for quarter 2 (based on manufacture of 900 units).................................. 5
e) Actual costs for quarter 2................................................................................................ 5
f) Variances between budget and actual costs for quarter 2............................................... 5
2. Identify two of the significant variances, and.................................................................6
a) Suggest possible reasons for them.................................................................................. 6
b) Propose two suitable corrective actions, justifying your choice of these particular
actions.....................................................................................................................................7
c) Evaluate the costs and benefits of these two possible corrective actions........................8
References............................................................................................................................... 11
, 1. Prepare a statement in columnar form to show the following
information.
a) Original budget for quarter 1 (based on manufacture of 1,000 units)
b) Actual costs for quarter 1
c) Variances between budget and actual costs for quarter 1
Burnside Limited
Original Budget for Quarter 1
Budget (1,000 Units) Actual (1,000 Units)
Description Variance (£)
(£) (£)
Income (1,000*200) 200,000 200,000 0
Materials (1,000*70) 70,000 70,000 0
Labour (1,000*50) 50,000 50,000 0
Electricity for production
5,000 8,000 (5,000-8,000) = -3,000 U
(1,000*5)
Standing charge for
10,000 12,000 (10,000-12,000= -2,000 U
electricity
Depreciation 10,000 10,000 0
Rent and rates 15,000 15,000 0
Administration costs 10,000 10,000 0
Total cost 170,000 175,000 (170,000-175,000) = -5,000 U
Actual – Budget
Profit 30,000 25,000
25,000 - 30,000 = 5,000 U
2
