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### C. Cost Control The partners believed that controlling cost is critical to their long term profitability. The following are budgeted and actual activities and cost for the first month of business: | | SBB | SB | |-----------|-------------------------|---------------------| | Units | Budget: 1050 | Actual: 990 | Budget: 450 | Actual: 475 | | Pattie | RM 3,150 | RM 3,100 | RM 675 | RM 730 | | Bread | RM 525 | RM 520 | RM 450 | RM 490 | | Toppings | RM 1,575 | RM 1,550 | RM 675 | RM 720 | | Fries | RM 840 | RM 800 | RM 450 | RM 455 | | Packaging | RM 210 | RM 200 | RM 90 | RM 96 | | Drinks | RM 525 | RM 500 | RM 225 | RM 250 | | O/H | RM 4,074 | RM 4,014 | RM 1,746 | RM 1,746 | #### Required: I. Prepare a cost performance report for the first month of operation (Compare actual costs with flexible budgeted costs). II. Discuss the possible causes for significant costs variances (favourable and unfavourable) and recommend corrective actions to rectify the costs variances. ### Explanation of the Table: - **Units:** Shows the number of units budgeted and realized. In SBB, the unit count slightly declined from the budget (1050 to 990), whereas SB saw an increase (450 to 475). - **Pattie, Bread, Toppings, Fries, Packaging, Drinks, O/H:** Lists different cost elements in RM (Ringgit Malaysia). For each element, the budgeted costs are compared to the actual costs for both SBB and SB. ### Cost Performance Analysis: - **Pattie:** - SBB: Budgeted RM 3,150 vs Actual RM 3,100 (Slightly favorable variance) - SB: Budgeted RM 675 vs Actual RM 730 (Unfavorable variance) - **Bread:** - SBB: Budgeted RM 525 vs

### C. Cost Control The partners believed that controlling cost is critical to their long term profitability. The following are budgeted and actual activities and cost for the first month of business: | | SBB | SB | |-----------|-------------------------|---------------------| | Units | Budget: 1050 | Actual: 990 | Budget: 450 | Actual: 475 | | Pattie | RM 3,150 | RM 3,100 | RM 675 | RM 730 | | Bread | RM 525 | RM 520 | RM 450 | RM 490 | | Toppings | RM 1,575 | RM 1,550 | RM 675 | RM 720 | | Fries | RM 840 | RM 800 | RM 450 | RM 455 | | Packaging | RM 210 | RM 200 | RM 90 | RM 96 | | Drinks | RM 525 | RM 500 | RM 225 | RM 250 | | O/H | RM 4,074 | RM 4,014 | RM 1,746 | RM 1,746 | #### Required: I. Prepare a cost performance report for the first month of operation (Compare actual costs with flexible budgeted costs). II. Discuss the possible causes for significant costs variances (favourable and unfavourable) and recommend corrective actions to rectify the costs variances. ### Explanation of the Table: - **Units:** Shows the number of units budgeted and realized. In SBB, the unit count slightly declined from the budget (1050 to 990), whereas SB saw an increase (450 to 475). - **Pattie, Bread, Toppings, Fries, Packaging, Drinks, O/H:** Lists different cost elements in RM (Ringgit Malaysia). For each element, the budgeted costs are compared to the actual costs for both SBB and SB. ### Cost Performance Analysis: - **Pattie:** - SBB: Budgeted RM 3,150 vs Actual RM 3,100 (Slightly favorable variance) - SB: Budgeted RM 675 vs Actual RM 730 (Unfavorable variance) - **Bread:** - SBB: Budgeted RM 525 vs

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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### C. Cost Control The partners believed that controlling cost is critical to their long term profitability. The following are budgeted and actual activities and cost for the first month of business: | | SBB | SB | |-----------|-------------------------|---------------------| | Units | Budget: 1050 | Actual: 990 | Budget: 450 | Actual: 475 | | Pattie | RM 3,150 | RM 3,100 | RM 675 | RM 730 | | Bread | RM 525 | RM 520 | RM 450 | RM 490 | | Toppings | RM 1,575 | RM 1,550 | RM 675 | RM 720 | | Fries | RM 840 | RM 800 | RM 450 | RM 455 | | Packaging | RM 210 | RM 200 | RM 90 | RM 96 | | Drinks | RM 525 | RM 500 | RM 225 | RM 250 | | O/H | RM 4,074 | RM 4,014 | RM 1,746 | RM 1,746 | #### Required: I. Prepare a cost performance report for the first month of operation (Compare actual costs with flexible budgeted costs). II. Discuss the possible causes for significant costs variances (favourable and unfavourable) and recommend corrective actions to rectify the costs variances. ### Explanation of the Table: - **Units:** Shows the number of units budgeted and realized. In SBB, the unit count slightly declined from the budget (1050 to 990), whereas SB saw an increase (450 to 475). - **Pattie, Bread, Toppings, Fries, Packaging, Drinks, O/H:** Lists different cost elements in RM (Ringgit Malaysia). For each element, the budgeted costs are compared to the actual costs for both SBB and SB. ### Cost Performance Analysis: - **Pattie:** - SBB: Budgeted RM 3,150 vs Actual RM 3,100 (Slightly favorable variance) - SB: Budgeted RM 675 vs Actual RM 730 (Unfavorable variance) - **Bread:** - SBB: Budgeted RM 525 vs
Transcribed Image Text:### C. Cost Control The partners believed that controlling cost is critical to their long term profitability. The following are budgeted and actual activities and cost for the first month of business: | | SBB | SB | |-----------|-------------------------|---------------------| | Units | Budget: 1050 | Actual: 990 | Budget: 450 | Actual: 475 | | Pattie | RM 3,150 | RM 3,100 | RM 675 | RM 730 | | Bread | RM 525 | RM 520 | RM 450 | RM 490 | | Toppings | RM 1,575 | RM 1,550 | RM 675 | RM 720 | | Fries | RM 840 | RM 800 | RM 450 | RM 455 | | Packaging | RM 210 | RM 200 | RM 90 | RM 96 | | Drinks | RM 525 | RM 500 | RM 225 | RM 250 | | O/H | RM 4,074 | RM 4,014 | RM 1,746 | RM 1,746 | #### Required: I. Prepare a cost performance report for the first month of operation (Compare actual costs with flexible budgeted costs). II. Discuss the possible causes for significant costs variances (favourable and unfavourable) and recommend corrective actions to rectify the costs variances. ### Explanation of the Table: - **Units:** Shows the number of units budgeted and realized. In SBB, the unit count slightly declined from the budget (1050 to 990), whereas SB saw an increase (450 to 475). - **Pattie, Bread, Toppings, Fries, Packaging, Drinks, O/H:** Lists different cost elements in RM (Ringgit Malaysia). For each element, the budgeted costs are compared to the actual costs for both SBB and SB. ### Cost Performance Analysis: - **Pattie:** - SBB: Budgeted RM 3,150 vs Actual RM 3,100 (Slightly favorable variance) - SB: Budgeted RM 675 vs Actual RM 730 (Unfavorable variance) - **Bread:** - SBB: Budgeted RM 525 vs
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