### 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q3: Flexible budget for a product as prepare by Anchor Ltd, is given below: Sales – unit 10,000 15,000 20,000 Rs. Rs. Rs. Sales 800,000 1,200,000 1,600,000 Manufacturing cost: Variable 300,000 450,000 600,000 Fixed 200,000 200,000 200,000 Total manufacturing cost 500,000 650,000 800,000 Marketing and other expenses: Variable 200,000 300,000 400,000 Fixed 160,000 160,000 160,000 Total Marketing and other exp 360,000 460,000 560,000 Operating…
QUESTION 2 2.1 REQUIRED Use the information provided below to prepare the performance report for Lonmin Limited. INFORMATION Lonmin Ltd manufactures a single product. It originally planned to produce and sell 18 000 units during the year but the actual activity level was 22 000 units. The budgeted and actual income and cost for the year are as follows: Original Budget Actual results Volume 18 000 units 22 000 units R Sales 2 520 000 3 300 000 Cost of sales (1 670 000) (2 132 000) Direct Materials 720 000 924 000 Direct labour 450 000 594 000 Variable overheads 180 000 264 000 Fixed overheads 320 000 350 000 Gross Profit 850 000 1 168 000
Question Content Area Given the following information, determine the activity rate (rounded to the nearest cent) for setups. Activity Total Activity-Base Usage Budgeted Activity Cost Setups 10,000 $57,200 Inspections 23,400 $149,700 Assembly (dlh) 73,800 $394,500 a. $5.61 b. $5.35 c. $6.40 d. $5.72
Problem 2 The manager of the Spartan Land Restaurant is developing the operating budget for next vear using the following financial information from the current year: Current Year's Next Year's Percentage Increase (Decrease) Next Year's Amount ($) Item Amount Food revenue 00$973,000 4% $112,500 2% Beverage revenue Food cost 000. 36% 1% Beverage cost Labor (including benefits) Other operating costs 23% d ate (1%) $298,000 (2%) 16% same Encar Fixed costs $70,000 same a. What is the current year's budgeted profit (loss)? b. Develop next year's budget: indicate the profit (loss).
Example 1 Budgeted Data: Support Departments Janitor $415,000 12,000 VC or VMOH base: sq. ft. base: employees 25 (2) the step-down method, and Personnel $150,000 20,000 (3) the reciprocal method. 4 Operating Departments Mixing $130,000 10,000 75 Canning Determine the amount of Janitor and Personnel department costs that would be allocated to the Mixing and Canning departments' budgets using (1) the direct method $170,000 70,000 50
q4: Flexible budget for a product as prepare by Anchor Ltd, is given below: Sales – unit 10,000 15,000 20,000 Rs. Rs. Rs. Sales 800,000 1,200,000 1,600,000 Manufacturing cost: Variable 300,000 450,000 600,000 Fixed 200,000 200,000 200,000 Total manufacturing cost 500,000 650,000 800,000 Marketing and other expenses: Variable 200,000 300,000 400,000 Fixed 160,000 160,000 160,000 Total Marketing and other expen 360,000 460,000 560,000 Operating…
View Policies Current Attempt in Progress Avalon, Inc's static budget shows $40,500 budgeted for direct materials, $54,000 budgeted for direct labor, and $13,500 budgeted for overhead. Avalon's actual direct materials were $42,000, actual direct labor was $51,000, and actual overhead was $13,800. What is the total difference between the static budget and actual, and is the difference favorable or unfavorable? O $4,800, unfavorable O $1,200, favorable O $1,200, unfavorable O $4,800, favorable Save for Later Attempts: 0 of 1 used Submit Answer
Current Attempt in Progress Sandhill's, Inc. has provided you with the following financial information: Budgeted Actual Sales Quantity 8,100 8,300 Sales price per unit $6.50 $6.25 Variable product cost per unit 2.50 2.75 Selling expense (fixed) 5,100 8,100 Administrative expense (fixed) 17,100 16,100 Income tax expense 3,900 4,100 Prepare a flexible budget. SANDHILL'S, INC. Flexible Budget Sales Revenue
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Budgetary Performance for Cost Center Suwanee Company's costs were under budget by $28,500. The company is divided into Left and Right regions. The Left Region's costs were over budget by $2,000. Determine the amount that the Right Region's costs were over or under budget.
A9

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