Please explain the characteristics of the relevant cost and give two examples of the irrelevant cost. 2. “The Traditional budget enables better cost control within firms”, discuss the previous statement with giving two examples of the main alternative budgets systems that you learn this year. 3. London Manufacturing Limited developed the following standard costs for direct material and direct labour for one of their major products, the 40 litres heavy-duty plastic container. Each container requires the following: Types of Cost Standard quantity Standard price Direct labour 0.2 hours £18 per hour During March, London Manufacturing Limited produced and sold 5,000 containers using 1,300 direct labour hours at an average wage of £17 per hour. Required: Calculate the Direct Labour Rate and Direct Labour efficiency variances. 4. External considerations in performance management can have an impact on how the organization performs and the steps to be taken to improve performance. Required: Explain the need to allow for external considerations in performance management.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question 3
ANSWER ALL PARTS OF THE QUESTION
|
Types of Cost |
Standard quantity |
Standard price |
|
Direct labour |
0.2 hours |
£18 per hour |
During March, London Manufacturing Limited produced and sold 5,000 containers using 1,300 direct labour hours at an average wage of £17 per hour.
Required:
Calculate the Direct Labour Rate and Direct Labour efficiency variances.
Required:
Explain the need to allow for external considerations in performance management.
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